econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 07 January 2018

A Timely Lesson For Today's Stock Market Investors

from Elliott Wave International

"The names may change, but the psychology remains the same."

Have you ever compared chart patterns from history with financial markets today? Elliott Wave International can show you the unique value of doing exactly that. Why?

Because patterns on market charts repeat themselves. It happens across the globe, regardless of time period. When a still-unfolding pattern in the present looks a lot like a chart from the past, the price action to come may well remain on that earlier path.

Which means you can anticipate what's next. [Ed. note: this video link shows you an example]

As the book The Mania Chronicles (2009) by Peter Kendall and Robert Prechter says:

The names may change, but the psychology remains the same.

The Mania Chronicles is an account of the financial bubble between 1995 and 2008, and it illustrates the point with this September 2000 chart and commentary:

Since January [2000], the Elliott Wave Financial Forecast has been tracking the NASDAQ's uncanny resemblance to the Japanese Nikkei-225 in 1989 and 1990. Now that it has fallen and bounced, it has acquired a look that is also very similar to the post-peak performance of the 1929 DJIA, the 1987 DJIA and the 1997 Hong Kong Hang Seng index.

In all cases, the manic final run to all-time highs was followed by an initial leg down that led to a three-wave countertrend rebound, the classic Elliott wave signature of a correction. Look closely, and you will notice that these rebounds usually start with a big up day (sometimes on a gap) that fools the bulls into thinking that a major bottom has been recorded. The rallies last mere days, though, and then prices turn down in a crash. The NASDAQ gapped higher off its May low at 3043 and then traced a three-wave move to the September 1 high of 4260. The decline since then has violated the trendline support that contained the entire countertrend rally.

…The clock is ticking for the start of the "cascading phase" of the pattern. Prices may rally briefly, but a severe decline is likely.

As we now know, the NASDAQ did cascade downward into 2002, with the entire 2000-2002 bear market consuming 78% of the index's value.

Lately, Elliott Wave International has also been reviewing other chart formations with similarities to the present.

In July 2017, the Elliott Wave Financial Forecast showed this chart and said:

The chart shows [a] succession of tops. The bottom four panels show peaks in real estate, commodities and bonds since 2006, and an impending high in stocks. The topping sequence is similar to that which occurred during the last peak of Supercycle degree, wave (III) in 1929. The current top is a Grand Supercycle degree peak ….

Since we showed that chart in July 2017, yet another chart pattern surfaced in the stock market -- and it's eerily similar to 1929. EWI's Robert Folsom reveals that pattern, in his Chart of the Day video titled "Believe Your Own Eyes: Ghost of a Stock Market Past in the Present." Follow this link to watch the video.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors








search_box
Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.







Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government




























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved