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Let’s Look at 2 Measures of the “Boom of Booms”

This gauge of the ongoing financial mania hit “a record year in 6 months!”

by Bob Stokes
Updated: September 08, 2021

Stock market prices near all-time-record highs is certainly a major measure of the current financial boom.

Other gauges include a red-hot housing market and crypto-mania.

All of these are highly publicized.

Yet, let's focus on two more measures of the ongoing financial mania. The financial press gives them less attention, yet they are notable.

The August Elliott Wave Financial Forecast explained by showing these two charts and saying:

BoomofBooms

The aftermarket performance of IPOs, as represented by the Renaissance IPO Index, peaked on February 16 and is still down nearly 17%. The losses clearly did nothing to curb venture capital or IPO funding. In fact, the record $287 billion in global venture dollar volume raised in the first half of 2021 is more than 50% higher than the prior record in the second half of last year. Meanwhile, U.S. IPO proceeds jumped to nearly $216 billion in the first half of the year, surpassing the annual total for all prior years. The total number of first-half deals hit 764, also a new annual record.

In his July Elliott Wave Theorist, Elliott Wave International President Robert Prechter mentions the single overriding factor that's created this "boom of booms":

All aspects of the financial markets--sky-high stock prices, super low junk-bond yields, nonexistent T-bill yields, a nationwide buying frenzy in real estate and a subculture of bullish cryptocurrency fanatics--are due to one thing: historically elevated social mood.

So, with social mood at such a high level, it's not surprising to see a headline like this one (Fortune, August 10):

The U.S. venture capital world is blistering hot. Why it won't cool down just yet

However, keep in mind -- that as sure as night follows day -- today's optimistic social mood will transition to a mood of pessimism -- sooner or later.

For example, toward the end of the last bear market, total IPOs fell to zero in the month of December 2008.

Right now, the Elliott wave model -- which is a direct reflection of the repetitive patterns of social mood -- indicates that another shift will occur sooner rather than later.

Get our financial forecasts by following the link below.

A Key Stock Market Divergence “Remains Intact”

See that divergence for yourself in our just-published September Elliott Wave Financial Forecast.

Indeed, the second chart in this new issue of the EWFF is titled:

One Bear Market Underway, Another to Follow

You may ask, "What bear market?"

That's a fair question -- and our analysis delivers a clear and complete answer.

Plus, you'll find Elliott wave analysis of the U.S. Treasury long bond and learn why you can expect "an impending trend change in munis."

Also, review our commentary on gold, silver, the U.S. dollar, U.S. economy and more.

It's all inside our just-published September Elliott Wave Financial Forecast: read it by following the subscription link below.

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