Europe's Stock Reversal: The Setup Was Ideal

Home > European Markets
Europe's Stock Reversal: The Setup Was Ideal
2 examples of Elliott wave analysis being one step ahead of mainstream analysis

By Nathaniel Williams
Mon, 21 May 2012 16:15:00 ET

Get investable insights sent to your inbox at least once a week – for free. Challenge the way you think about investing with The EWI Independent.

Privacy

The European debt crisis is fast-moving. You need reliable, timely insights to stay ahead of the market action. Who do you trust for your European market analysis? Unfortunately, mainstream analysis has been behind the curve -- or simply wrong -- in recent months.

Let's look back to fall 2011, for example. After European stocks plunged 20% to 30%, Fidelity declared European markets to be the "best buying opportunity since 2009." EWI's European Financial Forecast thought otherwise. Commenting on the financial services company's recommendation, editor Brian Whitmer said, "At the start of a renewed decline, traders view every sell-off as an opportunity to get back in."

Stocks did enjoy a brief rally, but it was certainly not Europe's best buying opportunity since 2009. To date, most European stocks have failed to surpass their early 2011 highs. In fact, some, such as Spain and Italy, recently breached their 2011 lows.

Jump forward to March 2012. You might have read headlines like these:

"Buoyant banks lift European stocks" - Reuters UK (March 1, 2012)
"Global Markets: European Stocks Seen Up; Investors Hopeful on Greece" - Dow Jones (March 8, 2012)
"European stocks rally on Greek-debt-deal hopes" - MarketWatch (March 8, 2012)

While mainstream analysts tried to calculate every way the Greek debt deal could boost stocks, the March 2012 European Financial Forecast instead pointed out that near- and long-term gauges of investor sentiment were reaching a critical juncture: "The setup for a stock reversal is ideal," wrote Whitmer.

Ideal, indeed. Most European markets topped in mid-March and have since fallen 10% to 23%.

Again: Who do you trust for your market analysis? Staying ahead of the trend is more important now than ever. In both of these recent instances, European Financial Forecast readers were ahead of the market action -- while mainstream analysts and those who follow them were caught by surprise.

Find out what EWI's European analyst sees next for Europe in the May 2012 European Financial Forecast. You get objective Elliott wave forecasts and analysis for the U.K., France, Germany, Spain, Italy, Switzerland and the euro with 9 detailed charts across 9 pages. It's a truly forward-thinking, objective perspective you won't find elsewhere -- and you can put it on your screen in minutes risk-free.

PLUS, Brian Whitmer will host a subscriber-exclusive webinar on June 11, 2012, to deliver an in-depth look into what's going on in European markets right now. You can reserve your spot for this timely, critical webinar when you start your risk-free subscription.

Preview the May 2012 European Financial Forecast now>>

Tags: european markets, eurozone

July 10-13

Freedom Fest Conference

Get an Unconventional Yet Accessible Look at European Markets

The European Financial Forecast gives you an invaluable big-picture outlook for major European bourses to give you an edge over the investing herd.

Each monthly 10-page issue gives you timely, Elliott wave analysis and forecasts of the DAX, FTSE, CAC, Euro Stoxx 50 and more, plus commentary on economic and social trends.

Preview the Latest European Financial Forecast Now>>

Most Read

Highest Rated

Free Report

The European Debt Crisis

The European Debt Crisis is affecting investments across the globe. Our new free report offers commentary from February 2010 through November 2011 that will help you to better understand what could be in store in the coming months and years.
Download your FREE report now.

European Markets

CLOSE [ X ]

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.