2022 was a Year of Crashes and Comebacks. In Focus: Nike, Inc. & NVR, Inc.
2 Stocks. 2 very different performances. AND -- 1 Elliott wave way to anticipate both.
by Nico Isaac
Updated: January 13, 2023
It's 2023! With another revolution around the sun comes another list of resolutions for becoming a more fit, focused, financially secure version of oneself.
But the fact remains: Since the first-ever new year's pledge was made by Babylonians some 4000 years ago -- likely a promise to eat less mulberry porridge -- most of these promises aren't kept. The reason being: They're made in a vacuum to oneself by oneself; like the year I swore to learn to ride a unicycle by watching YouTube videos of famous acrobats. (Spoiler alert: I now set off the TSA metal detector with my ankle screws. True story.)
In turn, the science shows a key to adopting -- and sticking -- to new, learned behaviors is having a group or teacher encouraging and educating you every step of the way.
If you're reading this page, you might be looking for just this kind of teacher-led experience to give you that extra push to becoming a more skillful trader or investor in 2023. And that's exactly where our Trader's Classroom service comes in.
Think of Trader's Classroom as your personal trainer for building up a strong Elliott wave muscle. Every video lesson features real markets whose price charts mirror textbook Elliott wave guidelines and rules, or display patterns signaling potential new or ongoing market opportunities.
Take, for instance the athleticwear giant Nike Inc. In December 2021, the Big Board listee NKE stood just below its record high rim. And, according to the mainstream pundits, the flagship company had a bevy of bullish "fundamental" factors to underpin the upside. Offered Motley Fool on December 23:
"$1 Billion New Reasons to Be Optimistic About Nike Stock"
"If investors had any doubt about whether Nike is still in growth mode, its spiking marketing spending should ease those concerns. At over $1 billion of branding and promotions this quarter, which management calls "demand creation expense," this discretionary commitment is surging compared to last year."
Elliotticians understand that news and events are not always the main driver of price trends, not even $1 billion worth. Investor psychology, which unfolds as Elliott wave patterns on market price charts, usually is. And here in Nike, the Elliott wave picture paved the way for a significant selloff.
On December 16, our Trader's Classroom presented the following price chart of NKE, which showed prices at the end of a five-wave rise, the exact number of a complete, Elliott wave impulse. Said Trader's Classroom:
"If we have indeed finished a larger five wave move up from the 2020 low, then we're looking to head all the way back down to 125."
From there, Nike deflated like an Air Jordan on a bed of nails, plummeting below 125 in May 2022 and continuing to fall before staging a small rebound into August. Then, on August 31, 2022, Trader's Classroom revisited Nike Inc. to warn the downside was still very much intact:
"We talked about this back in December 2021, believe it or not, and the focus was to the downside. And the reason was because from the 2020 low, we had waves 1-2-3-4-and 5. The initial focus was to come back down to this area of 125...
"Well, if we look at the smaller term price action, the move up is slow, choppy, contains numerous overlapping waves, is contained within parallel lines -- it has all the earmarks and characteristics of a countertrend move. So the selloff that began in late 2021 is still very much in force.
"Wave patterns support the idea of further decline in Nike down to below 92.20."
And, this next chart captures the extent of Nike's descent into a near 3-year low on September 30.
As for a more recent example, let's look at the home construction company NVR Inc. It's stock, NVR, is the second-most expensive Big Board listee so the only splits its doing is to its shorn timber. On November 1, Trader's Classroom presented this chart of NVR, which showed the opposing Elliott wave modality from the five-wave impulse in Nike. Here, in NVR, we identified a three-wave countertrend structure known as a zigzag.
Wave C of zigzags usually move well beyond the end of wave A, hence the bold arrow pointing NVR higher.
And from there, NVR followed its Elliott wave script, soaring to 10-month highs in January.
To anticipate trend changes in the markets you follow, you must understand why they go up and down -- you must see the pattern. Our Trader's Classroom service is where education in pattern recognition meets opportunity.
Resolve to become a stronger, and more independent participant in the markets you follow AND watch the newest lessons instantly.
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3 times a week, press "Play" and watch the instructor Robert Kelley explain in comprehensive detail how to recognize the relevant Elliott wave patterns (and supporting technical indicators) underway now and in the future.
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