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Evidence That Gold and Silver Are Not So Precious During Economic Downturns
History reveals that precious metals perform poorly during recessions and depressions.

By Bob Stokes
5/15/2013 5:30:00 PM

It's often said that gold and silver "always" go up during hard economic times. But you might be surprised to learn what the historical evidence says about this widely held belief. Let's start with gold ...

Filed Under: Elliott Wave Theorist, Gold, precious metals, Robert Prechter, silver

Category: Gold and Silver


Why Trend Extrapolation Doesn't Work in Financial Markets
History is filled with dramatic social changes.

By Robert Prechter, Jr., CMT
5/14/2013 1:30:00 PM

Futurists nearly always extrapolate past trends, and they are nearly always wrong. You cannot use extrapolation under the physics paradigm to predict social trends, including macroeconomic, political and financial trends. The most certain aspect of social history is dramatic change.

Filed Under: Elliott Wave Theorist, Robert Prechter, social mood

Category: Classic Prechter


Higher Housing Prices: Prepare for the Flop to Follow the Flip
Will real estate history repeat?

By Bob Stokes
5/10/2013 5:30:00 PM

The National Association of Realtors reports that home prices are up 11.6% year over year. And that has a new surge of house flippers into the real estate market. If the housing market is poised for another dramatic downturn, almost no one sees it coming.

Filed Under: all the same market theory, Bob Prechter, Elliott Wave Theorist, herding, history, housing prices, market crash

Category: U.S. Economy


The Most Efficient Path of the Stock Market Unfolds at Large Degree
Investors face a historical juncture in the price pattern.

By Bob Stokes
5/8/2013 12:45:00 PM

In the 1920s, R.N. Elliott was a successful author, consultant and accountant. But late in that decade he contracted a debilitating and near-fatal illness that left him bedridden. He chose to pass the time by studying the stock market's price patterns. His career had required meticulous attention to detail, and in turn he applied that rigor to his study of the market. Learn about his fascinating discovery and how it's relevant today.

Filed Under: Elliott Wave Principle, Elliott Wave Theorist, Fibonacci, market forecasts, Ralph Nelson Elliott, Robert Prechter, stock indexes, technical analysis

Category: Stocks


Even Major News Triggers Only Short-Term Market Reactions
Historical events serve as examples.

By Bob Stokes
4/25/2013 5:00:00 PM

Shortly after 1 p.m. on April 23, a phony posting on Twitter claimed that explosions occurred at the White House and that the President was injured. The Dow Industrials tumbled over 100 points in just a couple of minutes. When traders learned the tweet was false, the Dow just as quickly resumed the trend it had been on beforehand. But whether a given news item is phony or factual is irrelevant. Look at two charts to see how the market reacted to a major historical event.

Filed Under: Dow Jones Industrial Average (DJIA), Elliott Wave Theorist, history, investment decisions, long-term trend, Robert Prechter

Category: Stocks


Stunning Chart Shows Gold and Silver Defy Bulls' Optimism

By Editorial Staff
4/25/2013 4:00:00 PM

Gold and silver have been all over the financial news in recent weeks. A three-day tumble in mid-April pushed prices lower by as much as 31% and 56%, respectively, off their 2011 highs. The chart below shows EWI's forecasts not only in the past month ... but during the past three years of opportunity.

Filed Under: Elliott Wave Theorist, financial forecast, Gold, precious metals, Short Term Update, silver

Category: Gold and Silver


(Sample) A Historic Sentiment Peak So Extreme It Happens "Only Once in Centuries"
From the April 2013 Elliott Wave Theorist

By Robert Prechter, Jr., CMT
4/24/2013 8:30:00 AM

(From the new Elliott Wave Theorist) Not a single investment market – be it bonds, stocks, real estate, commodities or precious metals – stands anywhere near a major bottom today. Every one of them continues to show characteristics of being on the left or right side of a historic top of sentiment so extreme as to occur on average only once in centuries.

Filed Under: Elliott Wave Theorist, Robert Prechter

Category: Classic Prechter


The Smell of Tulips is in the Air on Wall Street
All manias end below where they started.

By Bob Stokes
4/23/2013 4:45:00 PM

Tulip prices in Holland skyrocketed in the 1630s. A farmhouse was reportedly purchased with three bulbs in 1633. But the peak of Tulip Mania came in the winter of 1636-37 when someone refused to pay top dollar. Is the U.S. stock market a modern day parallel? Learn why the day may be near when one seller and one buyer agree that prices are too high.

Filed Under: bloomberg, Elliott Wave Theorist, history, mania, market crash, South Sea Bubble, stock indexes, wisdom of crowds

Category: Stocks


Triple Top: The S&P 500 Goes Nowhere for 13 Years
Something's got to give, and it likely will.

By Bob Stokes
4/19/2013 4:45:00 PM

Technical analysts describe a triple top formation as a textbook "reversal" pattern. After the third peak, the downward price trend that follows may be steep and break below the two prior lows. If that break occurs, prices could descend into free-fall territory. In his March 2013 issue of The Elliott Wave Theorist, Robert Prechter refers to "the 13-year triple top ... from 2000 to 2013." What's more, this pattern does not stand alone.

Filed Under: Bear market, Bob Prechter, bull market, Elliott Wave Theorist, market crash, S&P 500, technical analysis

Category: Stocks


Bears Continue to Take a Giant Bite Out of Apple
Our charts reveal why professional analysts never saw the 40% freefall in Apple shares coming.

By Nico Isaac
4/18/2013 5:30:00 PM

Last September, with Apple Inc. shares soaring into the outergalactic $700 region, the mainstream experts tightened their grip on the upside. But instead of going to the moon, AAPL crashed back to earth in a 40% selloff to the 16-month lows we see today. One question remains: How could the professional analysts have gotten it so wrong?

Filed Under: Bear market, Bob Prechter, Elliott wave, Elliott Wave Theorist, herding, mutual funds, Robert Prechter

Category: Asian Markets


Prechter: "I'd Love to Turn Long-Term Bullish Again"
The next buying opportunity is going to be the one of a lifetime.

By Bob Stokes
4/17/2013 4:45:00 PM

Hindsight shows that Robert Prechter's August 1983 then-radical forecast of a "once-in-a-generation money-making opportunity" did happen. Yet that was a two-part forecast, so this question remains: Is the "biggest financial catastrophe" that Prechter foresaw still unfolding, or has the Fed confined the damage to the 2007-2009 financial crisis?

Filed Under: all the same market theory, Bear market, bull market, consumer confidence, consumer price index, deflation, Elliott Wave Theorist, Gold, Robert Prechter, soverign debt crisis, U.S. STOCK MARKET, unemployment

Category: Classic Prechter


Be On the Right Side of Risk-On Markets When the Herd Turns Risk-Off

By Gary Grimes
4/15/2013 2:30:00 PM

A growing number of investors – especially institutional investors – are positioning their money based on an observation The Elliott Wave Theorist published back in 2002. Asset classes such as stocks, bonds, commodities, metals and energy are more correlated than ever (the US dollar is inversely correlated). As far as we know, the Theorist was the first investment publication to talk about this phenomenon, likewise the first to give it a name ...

Filed Under: all the same market theory, Elliott Wave Theorist, risk appetite

Category: Stocks


Investors Pile $61 Billion into Stocks (But Look Who's Selling)
Technology executives sell shares at a record pace.

By Bob Stokes
4/12/2013 4:00:00 PM

A financial professional recently opined on television that "You have to be in this market." Investors beat him to the punch. They've piled $61 billion into stock funds and ETFs so far in 2013. Inflows are on track to be the largest since 2000. But not everyone is buying. Learn about one group that's been selling at a frantic pace.

Filed Under: buy and hold, Elliott Wave Theorist, herding, investor psychology, mania, sentiment, U.S. STOCK MARKET

Category: Stocks


The Single Most Important Leading Economic Indicator
History shows the stock market leads the economy.

By Bob Stokes
4/11/2013 5:45:00 PM

The phrase "leading economic indicators" refers to a core set of data points: the Consumer Price Index, real earnings, employment, U.S. Import and Export Price Indexes, Producer Price Index and so on. And Forbes recently listed several unusual economic indicators which include lip stick and wine auctions. Learn about the single most important economic indicator that trumps them all.

Filed Under: economic indicators, Elliott Wave Theorist, history, Robert Prechter, stock indexes

Category: U.S. Economy


A Perspective on a Forecast for Dow 18,000
Sound financial decisions are based on sound analysis.

By Bob Stokes
4/10/2013 5:00:00 PM

People who only consider the short-term – or hold an overly narrow point of view – can benefit from the advice to "put things into perspective." Because without perspective, we're certain to repeat the same short-sighted decisions, one after another. In his latest Elliott Wave Theorist, Robert Prechter puts the stock market's price pattern into proper perspective. The issue starts with the title, "More Amazing Charts."

Filed Under: Dow Jones Industrial Average (DJIA), Elliott Wave Theorist, home sales, investment decisions, Robert Prechter, sentiment

Category: Stocks


Raise Your Hand if You Believe Earnings Drive Stock Prices
Now, a mountain of evidence proves why this long-accepted belief is sorely misguided

By Nico Isaac
4/9/2013 6:00:00 PM

April is national Finanical Literacy month. With that in mind, we ask one simple true or false question: Do earnings drive stock prices? Wall Street and the financial media think the answer is as obvious as the blue sky on a cloudless day. In fact, when the 2013 corporate earnings season kicked off on April 8, the news was flooded with stories confirming the supreme role of earnings in market trends.

Filed Under: Bob Prechter, earnings, Elliott wave, Elliott Wave Theorist, financial forecast, market myths, Robert Prechter, S&P 500, U.S. STOCK MARKET, Wall Street

Category: Stocks


Just Watch the Next Bear Market on Television
Better to be a spectator than a participant in this event

By Bob Stokes
4/8/2013 4:45:00 PM

When you consider what's on television, one wonders if human nature has changed very much since Romans packed the Colosseum for gruesome entertainment. One cable channel offers wall-to-wall coverage of a famous murder trial. The 2007-2009 financial crisis turned into a made-for-TV drama. The next bear market could turn out to be an even bigger television spectacle. The Wall Street classic, Elliott Wave Principle: Key to Market Behavior, states that "human nature does not change."

Filed Under: Bear market, Elliott Wave Principle, Elliott Wave Theorist, financial forecast, herding, history, market forecasts, Robert Prechter, stock indexes, wisdom of crowds

Category: Stocks


20 Sentiment Measures Show Extreme Optimism for US Stocks

By Editorial Staff
4/2/2013 1:15:00 PM

Investor sentiment is a double-edged sword. It can be a fast-moving target with fleeting predictive value, but when several sentiment measures align, watch out!

Filed Under: Elliott Wave Theorist, financial forecast, Robert Prechter, sentiment

Category: Stocks


The Housing Recovery Rests on an Unstable Foundation
Yale's Robert Shiller says the recent rebound in home prices is "artificial"

By Bob Stokes
3/28/2013 5:30:00 PM

The housing market has gone from financial rubble to what some analysts describe as another bubble. It's true that home prices are still nearly 30% below their mid-2000s peak. Yet the recent surge has Robert Shiller of the Case-Shiller Home Price Index concerned. Learn why.

Filed Under: 1929 Stock Market Crash, all the same market theory, CNBC, commercial real estate, economic indicators, Elliott Wave Theorist, foreclosures, great depression, history, home sales, housing prices, quantitative easing, U.S. Federal Reserve (the Fed)

Category: U.S. Economy


NASDAQ's 15% Drop in 2000: a Snapshot of Market History or a Picture of its Future?
Is increased stock market volatility just ahead?

By Bob Stokes
3/27/2013 5:15:00 PM

From March to April 2000, the NASDAQ declined 15%. Many investors bought the dip in the months after the peak, but it was only the beginning of a larger decline. In the 2000-2002 price plunge, the technology-heavy index lost a whopping 78%. Do investors today have a similar mindset to the prevailing market psychology of 2000? Recent sentiment measures say "Yes."

 

Filed Under: Bear market, buy and hold, Dow Jones Industrial Average (DJIA), Elliott Wave Theorist, financial forecast, history, investor psychology, market crash, Nasdaq Composite, Robert Prechter, sentiment, VIX, volatility

Category: Stocks


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© 2013 Elliott Wave International

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.