Extreme Bullish Sentiment

This “Lopsided” Stock Market Ratio Is Sending a Clear Signal. Investors always find ways to “rationalize” bearish or bullish stances. For a stock market investor who understands that markets are not random or chaotic but instead patterned, the most important information to know is the price pattern of the market in question. For an Elliott READ MORE

Unprecedented Acceptance of Risk At Peak

U.S. Stocks: Here’s Evidence of a “Nearly Unprecedented Acceptance of Risk” Penny stocks fever has reached “the highest level since the first three months of 2000” Penny stocks tend to be highly illiquid. In other words, it’s difficult to buy and sell them at favorable prices. Even so, the lure of low-priced shares is hard READ MORE

Oat Milk Craze

Oat Prices AND the Truth Behind the “White Gold” Rush Oat futures’ recent surge to 7-year highs wasn’t caused by the oat milk craze; think “market psychology” instead. Generally speaking, the idea of oats is about as exciting as, well, a bowl of steel cut oatmeal. But this chart of oat futures shows why this READ MORE

Spike in Volatility Soon

Stock Market: Why You Should Prepare for a Jump in Volatility This volatility indicator “has made a series of higher lows” — and it’s not a good sign. Stock market volatility is like a roller-coaster ride — extreme ups and downs. However, unlike thrill-seeking roller-coaster riders who often rise from their seats after the ride READ MORE

Borrowed Money, Borrowed Time?

Margin: How Stock Market Investors Are “Reaching for the Stars” This is the highest ratio in the 20-year history of the data. One of the historic ways that stock market investors exhibit conviction about the direction of prices is to use leverage or participate in the market with borrowed money. Yet another way of putting READ MORE

Did Covid19 Cause the Stock Market Crash?

Think Coronavirus Caused the Crash? These Two Charts Beg to Differ Just about everyone thinks the coronavirus pandemic slammed global stock prices in February and March. Entire countries shut down; businesses closed up shop; unemployment soared. People stopped spending money beyond the essentials, so conventional wisdom would indeed expect stocks to slide as a result. READ MORE

Optimism Reigns at a Market Top

Many stock market investors believe that prices have already bottomed. Numerous banks, brokers and financial firms have issued statements saying as much. Indeed, the May Elliott Wave Theorist, a monthly publication which has offered analysis of financial and social trends since 1979, noted: On April 28, Bloomberg interviewed four money managers to answer the question READ MORE

Buying the Dip Can Backfire

“Buying the dip” might work in a rip-roaring bull market, but it can cost you your shirt in a severe downturn. Even so, this March 23 Wall Street Journal quote represents the mindset of many global investors: I’m Scared. That’s a Reason to Buy. The true contrarian only buys when it makes him feel physically READ MORE

Price and Volume in a Bear Market

A question was posed to Elliott Wave International President Robert Prechter for a classic Elliott Wave Theorist (Prechter’s monthly publication about financial markets and social trends since 1979): Under the Wave Principle, what is the most important thing to watch other than price? Prechter answered: Volume. You see, high trading volume means that traders are READ MORE

Recognize a Weakening Trend

Pay Attention to “Non-Confirmations” When a trend is strong, related markets tend to move in unison. However, when a trend is near exhaustion — a bullish or bearish trend, “non-confirmations” often occur. A non-confirmation occurs when one market makes a new high (or low), but a related market does not. As cases in point, our READ MORE

Bear Market Half Way?

This Will Signal the Bear Market’s Halfway Point On March 12, the date the DJIA closed lower more than 2350 points, the U.S. chief equity strategist for a major financial firm appeared on Bloomberg after the market close and opined that “90% of the damage has been done.” He went on to affirm that if READ MORE