The Trend is Set

What You Should Pay Attention to Next

Steve Hochberg and Pete Kendall, co-editors of our monthly Financial Forecast, sat down with ElliottWaveTV to discuss the volatility that followed Thursday’s Brexit vote.

Learn what the Brexit vote represents — and its implications for the world markets and economies.

Volatility is Raging — Prepare for what’s next, risk-free

Our subscribers were ready for most of this volatility. Elliott waves prepared us when the market turmoil first started in August 2015, re-ignited back in January — and returned again post-Brexit vote.

Right now, our flagship Financial Forecast Service again prepares you for what’s next in stocks, bonds, U.S. dollar, gold — and the economy.

Limited-time, risk-free offer: Lock in our most comprehensive investor package for 4 months — and only pay for 3 months. (You save 25% instantly.)

Click Here for Details and Instant Access

Where is Walmart Headed?

Walmart stock has dived throughout 2015 and is up from lows in 2016. Will the up-run continue? The era of “always low prices” no longer translates into always high profits. Learn what we think is behind the shift

By Elliott Wave International

Walmart founder Sam Walton said:

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Never were those words felt more acutely for those on the Walmart payroll than right now. Reason being: Over the last year, the eponymous Walmart “customer” has, indeed, taken his business elsewhere, fueling a series of epic setbacks for the retail giant:

  • Store closures, layoffs, and the shuttering of its entire fleet of smaller “Express” locations across the U.S.
  • A near 40% decline in its stock (WMT) before hitting bottom in November 2015
  • Losing its status as the world’s #1 retailer to Amazon
  • And — the sour cherry on top: The first decline in annual revenue since Walmart went public 45 years ago

In the words of a March 31 Bloomberg: It’s “the end of an era for Walmart.”

Which leaves one question: How the heck does a big-box behemoth go from retail victor to re-fail victim?

Well, according to the mainstream experts, the main cause of Walmart’s woes are many-fold, from falling oil prices – to – China’s flailing economy – to – the extinction of the brick-and-mortar store – to – the biggest baddest culprit of all, the brawny greenback:

“Walmart profits hit by strong dollar” (CNN Money)

Economists can always be counted on for providing endless explanations as to why a corporate king gets dethroned — after the fact.

But in our opinion, one’s time and energy is better served anticipating those turns. Which is exactly what our analysts did in regard to Walmart’s reversal of fortune — starting with our September 2013 Elliott Wave Financial Forecast’s bearish call for Walmart stock:

“We’ll stick with our contention that the economy is turning toward a deflationary depression. This long-term chart of Walmart is another under-the-radar clue to the unfolding debacle.

“It shows the world’s largest retailer completing a five-wave rally that dates back to the early 1980s. As consumers go on a buying strike over the next few years, Walmart’s stock should fall by at least 50%.”

From there, Walmart made one more new high at $90.97, after which the anticipated downside drama arrived in full force, with shares plunging 37% to end at a four-year low in November 2015.

Which brings us to the larger issue at hand: Walmart’s struggle to convert “always low prices” into always higher profits goes hand in hand with the underlying trend in the U.S. economy: that of deflation.

What You Need to Know Now About Protecting Yourself from Deflation

What You Need to Know NOW About Protecting Yourself from Deflation

In this free Special Report, you will learn about this unexpected but imminent risk to your portfolio AND you’ll get 29 specific forecasts for stocks, real estate, gold, cultural trends — and more (excerpted from Prechter’s New York Times bestseller Conquer the Crash — You Can Survive and Prosper in a Deflationary Depression).

Download your free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Woe-Mart: The Retail Giant Walmart Has Faltered. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

After a decade of FED help, economy is not out of the woods and another leg down may be imminent despite the printing press. Can Walmart survive? Arm yourself with knowledge you don’t see in mainstream media.

Global Markets Report for 2016

Where is the Stock Market headed? State of the Global Markets Report — 2016 edition, one of the most anticipated annual reports for investors and technical analysts, has just been released, and the first 10,000 copies can be reserved right now 100% free. After that, it goes to $99 per download, where it will stay for the rest of the year.

We know most investors are interested mostly in U.S. markets, but there’s an advantage to looking abroad, too. EWI has a keen understanding of how markets around the world fit into the global big-picture. After all, the Great Depression started in Europe then crossed the Atlantic to the Americas. So it’s important you keep an eye on the global big picture. As a result of reading this report, you’ll see what we EWI’s sees right now and for the rest of the year — both threats AND opportunities on a global scale. Click this link to learn more and download your free report now.

This report flies off the virtual shelves every year, and with this year being especially volatile so far, we arranged with the publisher to give you an immediate heads up so you can be among the first to get access.

This 50-page, chart-filled report may be the most valuable publication you read this year. It will help you avoid the dangerous pitfalls and spot the biggest opportunities in the year ahead.

Want to know what’s inside? Click this link to start reading it now. If you want a little context first, take a look at these headlines:

Wall Street makes worst ever start to a year (Financial Times)

Dow Tumbles Nearly 400 Points on China Worries (Wall Street Journal)

World markets plunge as oil drops below $27 a barrel (CNN)

Expect gold prices to be massively volatile (MarketWatch)

Notice anything interesting?

The thing that jumps out at me is how massively contrary today’s reality is compared to most experts’ projections for 2016 just a few short months ago. Not getting off to a great start, are they?

Now consider this: In the first week of this year, the Wall Street Journal polled 10 well-known fundamental analysts for their year-end forecast for the S&P 500. They projected on average the S&P to reach 2,193 by the end of the year. The lowest forecast was 2,100. The highest was 2,300.

Now that’s interesting enough, but get this: These same experts from the same poll one year ago projected the S&P to reach 2,201 by the end of LAST year!

Fast forward to today, investors and analysts have been in a panic as the markets ended 2015 well off those projections and kicked off 2016 with its worst start EVER.

U.S. stocks, Chinese stocks, gold, oil, the entire European Union — all are at pivotal junctures right now, and we’re only two months into the new year.

If you want to prepare for the rest of 2016 and equip yourself to adapt to rapidly changing trends around the world, I encourage you to follow this link and claim your copy now.

You will get instant access to Elliott Wave International’s annual State of the Global Market Report — 2016 Edition, one of the most widely circulated annual reports for investors and technical analysts.

The State of the Global Market Report provides a premium-level look inside the world’s largest independent financial forecast firm’s big-picture forecasts for 2016. It gives you a snapshot of what’s already occurred then focuses you squarely on what Elliott Wave International’s team of global analysts sees for the rest of 2016 and beyond. At about 50 chart-filled pages, it may be the most valuable publication produced each year to help investors position themselves wisely for the year ahead, avoid the dangerous pitfalls, and catch and ride the biggest, fastest-moving opportunities.

You may not read every line of this globally focused report, but we guarantee you will benefit from the insights that apply to your favorite markets.

Please follow this link to start reading the report now >>

This is a must read for all investors, professional or not! Consider the insights from this report before you make portfolio decisions!

Can the Money Disappear in Stocks?

Can Stock Values Simply “Disappear”? Yes.
And it’s happened before, too — just think back to the 2007-2009 financial crisis. You see, the money was never there to begin with. When your stock portfolio shows you have a million dollars worth of stocks, it simply means you can get million dollars if you can sell the stock at the current valuations. What is the current valuation? It is the value the latest buyer and seller agreed upon. It is not a guarantee that future buyers will agree to that valuation.

On Wednesday (Jan. 13) CNBC reported that,

“Almost $3.2 trillion has been wiped off the value of stocks around the world since the start of 2016, according to calculations by a top market analyst. U.S. stocks are now off $1.77 trillion, while overseas stocks are down $1.4 trillion.”

Stocks rallied on Thursday — but then tanked even harder on Friday, which probably made that $3.2 trillion figure even bigger.

But how can that be? Doesn’t money simply move from one asset class to another?

Our readers have asked us this question before — especially during the 2007-2009 financial crisis, when 54% of the Dow’s value got erased in just 18 months.

You may be wondering this, too. Well, here’s an answer — from Ch. 9 of Bob Prechter’s New York Times Business bestseller, Conquer the Crash:

Financial Values Can Disappear
(Excerpt, Conquer the Crash, ch. 9)

People seem to take for granted that financial values can be created endlessly seemingly out of nowhere and pile up to the moon. Turn the direction around and mention that financial values can disappear into nowhere, and they insist that it is not possible. “The money has to go somewhere … It just moves from stocks to bonds to money funds … It never goes away … For every buyer, there is a seller, so the money just changes hands.”

That is true of the money, just as it was all the way up, but it’s not true of the values, which changed all the way up.

Asset prices rise not because of “buying” per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else — including those who own some of that asset and those who do not — need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer’s, then the value of the asset falls, and it falls for everyone who owns it. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.

Anyone who watches the stock or commodity markets closely has seen this phenomenon on a small scale many times. Whenever a market “gaps” up or down on an opening, it simply registers a new value on the first trade, which can be conducted by as few as two people. It did not take everyone’s action to make it happen, just most people’s inaction on the other side.

The dynamics of value expansion and contraction explain why a bear market can bankrupt millions of people. At the peak of a credit expansion or a bull market, assets have been valued upward, and all participants are wealthy — both the people who sold the assets and the people who hold the assets. The latter group is far larger than the former, because the total supply of money has been relatively stable while the total value of financial assets has ballooned. When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else.

In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or non-existent valuations. The “million dollars” that a wealthy investor might have thought he had in his bond portfolio or at a stock’s peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just disappears.

You see, he never really had a million dollars; all he had was IOUs or stock certificates. The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons.

So, the answer comes down to “money” vs. “value.” Financial values don’t move from one asset to another. They can just disappear.

This perceived value stored in stocks is a reason of deflation. Once the valuations shrink, people who used to think they have money suddenly realize they do not have the money. They stop spending, start saving. Companies who could pay in stocks can no longer do so, and that strains their budgets, shrinks employee benefits, income. Companies who could borrow easily showing stocks as collateral can no longer do so. This is why the FED likes to create asset bubbles in housing and stocks to have the wealth effect. The problem is bubbles tend to pop, and the next pop may be due now.

There is no time to waste
Global stocks lost $3.17 trillion in the first 2 weeks of 2016

Were you ready? Are you ready for what’s next?

You can be.

[Urgent New Report] How to Survive and Prosper in this Global Financial Crisis. With global stocks losing $3.17 trillion dollars in the first 8 trading days of 2016 (CNBC), NOW is the time to download this free report from Robert Prechter. This report was adapted from Prechter’s New York Times bestseller, Conquer the Crash. You’ll get a list of “Imperative Do’s and Crucial Don’ts” for surviving and prospering in today’s volatile markets. There’s no time to waste. It’s time you prepare for what’s next, NOW. Read the Complete Report.

Risk On, Risk OFF?

Stocks got no-where in 2015. Gold topped back in 2011, oil bounce topped 2014. Various commodities resumed their decline during the last few years. Where is the stock market headed?

Risk On? Risk Off? Find Out Where Your Money Lies
A peek at the new free report from the editors of our Financial Forecast Service

It’s almost Christmas, “the hap-happiest season of all.” Yet, here’s a sobering fact for U.S. investors: S&P 500 stocks are actually lower now than at the end of last year (chart: Google Finance):

You could say that we’ve had a long bull market, so one “slow” year is OK. But Steve Hochberg and Pete Kendall, the editors of Elliott Wave International’s Financial Forecast Service, have recently documented several indicators which confirm that investors are actually losing their appetite for risk.

In fact, EWI has put together a subscriber-level special report with specific details on this phenomenon — from IPOs to corporate buyback to emerging markets.

You’ll find an excerpt below — and to read this new report in full, free, simply click here.


From Risk On to Risk Off

…Another example is the market for Initial Public Offerings, which The Elliott Wave Financial Forecast identified as ripe for a reversal back in the fall of 2014.

Citing a “euphoria” surrounding Alibaba, which remains the largest IPO ever, we noted a similarity to the record-setting deals that hit the market in November 1999 and March 2008. After each ebullient period, the overall market fell sharply. The long term chart of the Bloomberg IPO Index shows the reversal in the IPO aftermarket that followed each speculative episode:

Interestingly, the peaks are exactly 7.38 years from each other, creating a long-term cycle top that is now behind us. Since September 2014, more than half of the 35 companies that went public with initial valuations of more than $1 billion are now below their IPO price. Many of the most heavily hyped offerings since 2011 are also down dramatically from their post-IPO highs, such as Alibaba (-30%), Twitter (-65%), Zynga (-85%) and Groupon (-90%).

Square Inc., a digital payment company, was supposed to be the next high-flyer when it debuted in mid-November, but before it even hit the market, its prospects diminished as underwriters reduced its offering price to $9 a share, 20% below its estimated opening range.

According to The Wall Street Journal, “skeptical investors” forced the reduction, “further souring the market for new technology-company stock.” …

(Editor’s note: Emerging markets; mergers and acquisitions; corporate stock buybacks — see more warning signs in the rest of EWI’s new special report. Read it free now.)

It is a Mistake to Follow the Crowd

We’ve seen it time and again: The investment crowd often hops aboard a financial trend just as it’s about to end.

Government itself is actually a case in point. Here’s what the August 2007 Elliott Wave Financial Forecast said:

[In July], The Elliott Wave Financial Forecast discussed governments’ knack for committing to a trend when it is finally ending. A front page article in the July 24 issue of The Wall Street Journal titled, “Governments Get Bolder in Buying Equity Stakes,” confirms the strength of this very dependable sell signal.

Just two months later (October 2007), the stock market registered its historic high.

Overseas buyers are another major chunk of the investment crowd. That group was also ramping up their purchases of U.S. stocks back in late 2007.

Corporations are likewise part of the herd.

Let’s fast forward to 2015, and read what our August 14 Short Term Update had to say just before the worst part of the recent selloff:

Selling pressure was exhausted on Wednesday (Aug. 12), when stocks declined sharply early in the session but rallied to erase all or most of the early-day losses. The most astounding aspect of that day was [that] much of the stock being bought was not by individual investors or by institutions, but by companies themselves. A unit of Goldman Sachs that executes share buybacks for clients had its busiest day since 2011. … Companies are bad market timers.

Indeed, our independent analysis indicated that the stock market rally was ending. Here’s a chart that the August 14 Short Term Update showed [wave labels available to subscribers]:

By the end of the week that followed, the Dow and S&P were down nearly 6%, while the NASDAQ was down nearly 7%.

Here’s a weekly S&P 500 chart from August 21:

But even as the selloff was underway, still another group was hopping aboard what they thought would be a continued uptrend.

Millionaires may be richer — but they aren’t any better at predicting stock market moves than the rest of the population.

The latest Millionaire Investor Confidence Survey, from Spectrem Group, shows that millionaires became more bullish on the economy and markets just before stocks fell into correction territory in late August.

According to the survey, which was conducted between Aug. 14 and Aug. 20, millionaire confidence during the month rose to its highest level in 11 months … .

CNBC, September 2

As we know, the market timing of these millionaires could not have been worse.

Read our free report: Pandemonium in the Stock Market
Updated with new charts and analysis

No longer is extreme volatility contained to Greece or China. The massive waves are here in the States, just as our analysts predicted. Learn what’s behind the recent market chaos. Read excerpts and see eye-opening charts from Robert Prechter’s Elliott Wave Theorist, The Financial Forecast and our Short Term Update.

Get your free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Stocks: Why Following the Crowd is Often a Big Mistake. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Free Elliottwave Theorist

With the market action during the last few weeks, many investors have been operating in panic mode; subscribers to Robert Prechter’s Elliott Wave Theorist haven’t. Why?

Because they were prepared. Elliott Wave International prepared them for the 2007-2009 crisis, and they did it again. In fact, in the calm of Aug. 18, Bob wrote a sharp critique of the U.S. stock market in his newest Elliott Wave Theorist, in which he said to expect market “pandemonium.” (His commentary was published the following day.)

“as shown in this issue, time and price factors call for an immediate end to this dream state. When the alarm goes off and the dreamers awake, it will be pandemonium in the stock market. As the next few charts show, time and price have run out of room. Together, these time and price events seem finally to have cleared the way for a stunning decline in US stock prices.”

That’s just a taste of what Bob predicted in this critical issue. You need to see the rest for yourself, and now you can.

Our friends at EWI have given us permission to share Bob’s FULL August issue of TheTheorist. Free. Read all 10 pages and see all 15 charts!

Yes — I want to get ahead of the trend! Give me my free issue of Bob Prechter’s newestElliott Wave Theorist >>

DOW Falls 1000 Points in a week

Markets are crashing around the world. US is no exception. After a long bull run, 50 and 200 day averages are breached by the sharp decline in S&P 500. 50 day average may soon cross below 200 day for the first time  after a many years in many of the market indices.

This week’s stunning sell-off sent the Dow 1,000 points lower. Other markets have surprised investors lately, too:

  1. Crude oil just fell below $40 a barrel
  2. Gold just broke above $1160 an ounce
  3. The U.S. dollar is enjoying the strength not seen in years

Almost every step of the way, Elliott wave price patterns have guided our friends at Elliott Wave International and their subscribers:

  1. On July 24, EWI said to turn bullish on gold — the exact day of the intraday lows in gold and silver after four years of decline
  2. Crude oil has followed its Elliott wave script since 1998, including the all-time high near $150 in 2008 and the more recent secondary peak — one from which oil fell below $40 a barrel this week
  3. Wave patterns warned EWI and their subscribers of the huge declines in commodities and the huge rally in the U.S. dollar — both against nearly universal disagreement

The credit goes to the Elliott wave method. For the past 80 years, waves have warned thousands of investors like you about risks — and new opportunities! — at countless market junctures.

This week’s #1 story is the 1,000-point sell-off in the Dow. To show you what they’ve been saying about the markets, Elliott Wave International just put together a new, free 2-page Special Report with most relevant excerpts from their flagship publications: Elliott Wave Theorist andElliott Wave Financial Forecast.

It’s the kind of report a well-informed investor shouldn’t go without.

Read this Special Report now — instantly, and 100% free — to see for yourself the evidence markets are presenting!

The World is Awash in Oil

…But does that mean that oil prices will only go down from here?

In this new interview with Elliott Wave International’s Chief Energy Analyst, Steve Craig, you’ll learn where he sees prices going next.

*Editor’s note: this interview was recorded on August 12; the price low cited in the video was broken on August 13.

Market Myths Exposed

Free Report: “Peak Oil” — And Other Ways Crude Oil Fooled Almost Everyone

These excerpts from Robert Prechter’s Elliott Wave Theorist highlight the flaws in the conventional approach to forecasting oil prices — and show you why oil fooled almost everyone.

Take 10 seconds to get a free Club EWI password now — and get instant access to this free report >>

This article was syndicated by Elliott Wave International and was originally published under the headline (Interview) “The World is Awash in Oil”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

EURUSD – What is Next?

Think the recent rally in the euro was the result of “good news” from Greece? Think again.

Watch our Currency Pro Service editor, Jim Martens, explain what’s really behind the moves.

Trading Forex

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In this free 14-page eBook, our Senior Currency Strategist Jim Martens pulls from 25+ years of experience to show how to use Elliott wave to improve your analysis of the currency markets.

Learn how you can put the power of the Wave Principle to work in your forex trading.

Get this free 14-page eBook now >>

This article was syndicated by Elliott Wave International and was originally published under the headline (Interview) EURUSD: After the Rally, What’s Next?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

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