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End of a Trend… Then a 93% Plunge

See how a classic Elliott wave setup marked a pivotal point

by Bob Stokes
Updated: June 04, 2019

People are people the world over.

Hence, the same patterns of investor psychology that show up on market charts in one country also show up in all other countries.

Put another way, Elliiott wave analysis is useful globally, given that Elliott waves are a reflection of these recognizable and repetitive patterns. And, because these patterns are repetitive, they are also predictable.

In a bullish trend, the basic Elliott wave pattern is five-waves up followed by a downturn.

With that in mind, two years ago our July 2017 Global Market Perspective highlighted a new opportunity for subscribers in a group of British stocks when it said:

[T]ravel and leisure shares... display five waves up since 2009, thereby signaling an impending change of direction.

Consider Thomas Cook Group, the world's second-largest tour group operator. This British company dates back to 1841 and now has a staff of 22,000 in 16 countries, 19 million yearly customers and £9 billion in sales.

Now look at this updated chart from our current, June 2019 Global Market Perspective with the accompanying commentary below:

GMPChart-edit

Thomas Cook Group's shares traded at nearly 150 pence as recently as last summer. But as leisure shares fell, nearly two centuries of travel history ended in the blink of an eye. In just the past 12 months, Cook's investors have suffered through three profit warnings and watched the value of their stock plummet to 10 pence, a 93% decline.

Talk about a "change of direction"!

This is from a May 17 Bloomberg article:

Analysis by Citigroup, among other brokers, valued Cook's shares at zero following its first-half results announcement.

People are people the world over -- and so is investor psychology. That's just one example of how the Elliott wave model works in all liquid markets, regardless of the country.

Now is the time to see what our global analysts are saying about other chart patterns worldwide.

Look below to learn how to tap into the timely insights of our current, June 2019 Global Market Perspective, risk-free for 30 days.


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