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The Tipping Point for U.S. Markets
The "trigger" will be the first of many financial disasters
By Bob Stokes
Tue, 31 Jul 2012 16:45:00 ET
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If the stock market repeats the behavior we saw in 2008 (a relentless decline), the financial media will point to a "trigger."
 
Count on it.
 
That supposed trigger may be Europe's debt crisis, news about a major bank failure, or any one of dozens of stories of "stuff gone wrong" in the world of finance.
 
But that tipping point will be coincident with the start of the market's fall. There may also be lots of sunshine or rain on that day -- yet weather will not cause the market's price action.
 
The collective psychology of investors is what governs market prices, and that psychology moves in recognizable patterns. Elliott wave analysts study those patterns as they unfold in the price charts. What's more, the patterns repeat themselves at all degrees of trend.
 
In other words: If you recognize the pattern prices have been following, you can probabilistically forecast where prices will go next.
 
Right now, EWI analysts see a high-confidence price pattern at a large degree of trend. They've seen this same pattern many times at smaller degrees of trend and have a high-confidence forecast for how that pattern concludes.
 
The difference is, the next move will involve much more price territory.
 
Our market forecasts are not based on news events, but on the Elliott Wave Principle.
 
See what we see right now in the market's price pattern.
 
Preview EWI's Financial Forecast Service with no obligation.
 

 

Tags: Bob Prechter, Elliott wave, investment decisions, investment strategy, market forecasts, stock indexes, technical analysis, technical indicators
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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.