Category Archives: Stock Market

Discussion about the stock market, trading and investment, market timing.

Passive Investing Push Reaching Peak

What the New Passive Investing Push Tells You

The popularity of exchange-traded funds fits with the market’s Elliott wave structure

Stock picking is losing favor. On the other hand, passive investing is growing in popularity. This fits with the stock market’s Elliott wave pattern. The mania is not over, but the end might be closer than many investors realize.


 

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Early summer dinner-party guests have gathered around the pool for a drink or two before dinner is served.

Two of the guests start talking about investing, and then one offers the other the all-too-familiar “stock tip.”

The recipient might nod politely, but increasingly, those tips are going in one ear and out the other. Passive investing is what’s growing in favor (CNBC, June 26):

Exchange-traded funds, or ETFs, owned nearly 6 percent of the U.S. stock market as of the end of the first quarter, their greatest share on record.

Known as passive investments, ETFs are baskets of stocks tracking various market indexes and have grown in popularity for their relatively low fees. In contrast, mutual funds that involve higher-cost active stock picking have declined in popularity, and their ownership of the U.S. stock market has fallen to 24 percent, the lowest since 2004.

The article also notes that ETFS are on pace to buy $390 billion of stock this year, more than the last two years combined.

We’re not surprised by this latest ETF data. Indeed, our January 2017 Elliott Wave Financial Forecast showed this chart and said:

Passive Investing: In Theory and then Practice, a Product of Supercycle Wave V

Notice that most of the rise in index funds’ market share has come since the mid-1990s. This rise also fits the wave structure, as The Elliott Wave Theorist observed in 1997 that the final advance of the Grand Supercycle bull market would not be an ordinary bull market. It is a mania, and “a very human aspect of manias is that no prudent professional is perceived to add value to a client’s investment experience.”  … The historically unprecedented demand for index funds shows that some mania traits remain in place. The popular appeal of index funds will likely grow as stocks trace out the final waves of Primary wave 5.

The final wave of the entire investing mania may not be complete, but this massive push into passive investing tells us that we’re closer to the end than many investors might realize.

Now’s the perfect time to learn all you can about the market’s Elliott wave pattern. Our friends at Elliott Wave International have launched a new resource to show you what they see on the horizon. See below for full details.

3 Videos + 8 Charts = Opportunities You Need to See.

Join this free event hosted by Elliott Wave International and you’ll get a clear picture of what’s next in a variety of U.S. markets. After seeing this videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won’t get anywhere else.

Get your FREE report now — for a limited time.

This article was syndicated by Elliott Wave International and was originally published under the headline What the New Passive Investing Push Tells You. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by CMT Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Gold, Oil and Other Commodity Forecast

Are you paying attention to commodities? You should be.

Major moves in oil, gold and other commodities have offered up huge opportunities for traders in 2017.

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Has Apple Stock Topped?

Does AAPL’s 6% June slide indicate that a top is already in?

On June 29, the Apple iPhone turned 10 years old. But, for many, the mood surrounding the milestone was less than celebratory. Reason being, in June alone, Apple Inc. (AAPL) plunged 6% to two-month lows amidst a broad-scale bruising of the global tech sector.

And so, the cursor on some Smartphone stock trading apps sits there — blinking, blinking, blinking…

What’s the next move? Is AAPL’s 6% sell-off the start of a new downtrend. Or, will prices find a bottom and reclaim the upside?

It’s a simple question. And yet, finding an answer seems so complicated. The mainstream route can be a twisted rabbit hole of conflicting news items, such as these contradictory Apple Inc. outlooks from June 30:

  • “It’s time to bet against Apple” (CNBC)

— Versus —

  • “Apple Inc. (AAPL) Stock: Still a Strong Buy. Ignore ‘Peak’ Tech” (Investorplace.com)

And, if you’re not careful, the technical route can be just as confusing, leaving your price chart with more horizontal lines (to indicate potential targets) than a sheet of college-ruled paper.

Which brings us to EWI senior analyst Jeffrey Kennedy. In his June 15 Trader’s Classroom video lesson, Jeffrey shows traders a simple and effective strategy for determining how far a counter-trend move will travel — or, if said move marks the beginning of a new trend altogether. The best part is, knowing which scenario is underway comes down to TWO simple price levels:

  • Key support/resistance: Where prices will fall/rise to, and then reverse from if the larger trend is incomplete
  • Critical support/resistance: Where prices will penetrate if the trend is complete and a top/bottom is in place, thereby invalidating an Elliott wave interpretation

Listen to the following clip from Jeffrey’s June 15 Trader’s Classroom video to hear him explain how this strategy works in real time:

Listen to the following clip from Jeffrey’s June 15 Trader’s Classroom video to hear him explain how this strategy works in real time:

 

Jeffrey then shows a daily price chart of AAPL, marked by key levels where falling prices consistently dropped to, and reversed from, during the market’s year-long uptrend. He then homes in on the June sell-off to determine its specific Elliott wave structure, labeling it a fourth wave based on two pieces of evidence, see:

An acceleration gap, which “often occur in the wave three position of an impulsive structure.”

AAPL Chart 1

And, a decisive upside penetration of a base channel:

AAPL Chart 2

With a potential Elliott wave label in toe, Jeffrey then identifies the key and critical price levels for AAPL’s fourth-wave, June sell-off.

As Jeffrey puts it:

“Traders can utilize this approach on any market and on any time frame.”

He goes on to demonstrate its universal effectiveness in the real-time price action of the Dow Jones Industrial Average and sugar.

Watch Jeffrey’s June 15 Trader’s Classroom video in its entirety to see this simple, yet powerful trading strategy in action.

Announcing Trader Education Week: July 17-19

You’ve found a high-confidence trade setup. Now What? Spend this week getting FREE lessons on techniques to enter and exit trades with high confidence — from one of the world’s foremost market technicians, Jeffrey Kennedy. These free lessons will help you understand the necessary steps you should take when a new opportunity presents itself.

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Passive Investing Push Signals End of Bull Run

What the New Passive Investing Push Tells You

The popularity of exchange-traded funds fits with the market’s Elliott wave structure

Stock picking is losing favor. On the other hand, passive investing is growing in popularity. This fits with the stock market’s Elliott wave pattern. The mania is not over, but the end might be closer than many investors realize.


 

Early summer dinner-party guests have gathered around the pool for a drink or two before dinner is served.

Two of the guests start talking about investing, and then one offers the other the all-too-familiar “stock tip.”

The recipient might nodd politely, but increasingly, those tips are going in one ear and out the other. Passive investing is what’s growing in favor (CNBC, June 26):

Exchange-traded funds, or ETFs, owned nearly 6 percent of the U.S. stock market as of the end of the first quarter, their greatest share on record.

Known as passive investments, ETFs are baskets of stocks tracking various market indexes and have grown in popularity for their relatively low fees. In contrast, mutual funds that involve higher-cost active stock picking have declined in popularity, and their ownership of the U.S. stock market has fallen to 24 percent, the lowest since 2004.

The article also notes that ETFS are on pace to buy $390 billion of stock this year, more than the last two years combined.

We’re not surprised by this latest ETF data. Indeed, our January 2017 Elliott Wave Financial Forecast showed this chart and said:

Passive Investing: In Theory and then Practice, a Product of Supercycle Wave V

Notice that most of the rise in index funds’ market share has come since the mid-1990s. This rise also fits the wave structure, as The Elliott Wave Theorist observed in 1997 that the final advance of the Grand Supercycle bull market would not be an ordinary bull market. It is a mania, and “a very human aspect of manias is that no prudent professional is perceived to add value to a client’s investment experience.”  … The historically unprecedented demand for index funds shows that some mania traits remain in place. The popular appeal of index funds will likely grow as stocks trace out the final waves of Primary wave 5.

The final wave of the entire investing mania may not be complete, but this massive push into passive investing tells us that we’re closer to the end than many investors might realize.

Now’s the perfect time to learn all you can about the market’s Elliott wave pattern. Our friends at Elliott Wave International have launched a new resource to show you what they see on the horizon. See below for full details.

3 Videos + 8 Charts = Opportunities You Need to See.

Join this free event hosted by Elliott Wave International and you’ll get a clear picture of what’s next in a variety of U.S. markets. After seeing this videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won’t get anywhere else.

Get your FREE report now — for a limited time.

This article was syndicated by Elliott Wave International and was originally published under the headline What the New Passive Investing Push Tells You. 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.

Bull Markets Move in 5 Waves

How One Forecasting Tool Defied the Bull Market Naysayers

Three compelling Elliott wave charts lay it all out.

The Elliott wave model often indicates a stock market outlook that’s at odds with the sentiment of the crowd.

But, that’s okay. The crowd is usually wrong at major market turns.

For example, two years ago on May 9, 2015, the bull market was six years old and the third longest in history. A few days earlier, CNN Money said:

As the bull market gets longer and longer, investors are getting jittery.

A chart we created shows the then six-year uptrend and reiterates the sentiment of that time:

A stock market high did occur in May 2015, but it wasn’t THE high, as many investors expected.

As the chart shows, the S&P 500’s rise through that time completed a third wave, the longest and strongest part of a financial trend. Yet, major trends, whether bull or bear, advance or decline in five waves. Our model expected a wave 4 correction to follow – and then a wave 5 that would take stocks to higher highs.

In the Elliott wave model, waves one, three and five move in the same direction as the main trend. Waves two and four are countertrend moves. On the chart, you can see the decline represented by wave (2). Following the wave (3) advance, as you can see on the next chart, the reversal of wave (4) stretched into the early part of 2016:

Indeed, in February 2016, our Elliott Wave Theorist said:

…we can finally judge wave C …to be complete.

What that meant was that a year and a half ago, wave (4) was complete — and wave (5) up to new highs was set to start.

Even so, around that time, two financial websites showed identical headlines:

  • Is the Bull Market Over? (Motley Fool, Jan. 23, 2016)
  • Is the bull market over? (CNBC, March 9, 2016)

The second headline published on the seventh anniversary of the bull market, prompting market writers to question the sustainability of the bull market.

But the market’s Elliott wave pattern is not beholden to anniversaries or any other such factors.

How has the February 2016 Theorist’s forecast played out? Well, as it’s been said, a picture is worth a thousand words. Take a look:

Yes, since the Theorist nailed the completion of wave (4), the S&P 500 has rallied more than 25%.

You’ve just seen an example of why our subscribers are convinced of the Elliott wave model’s value.

Now, it’s up to you to get the details of what we anticipate next.

Here’s the good news: You can read the entire 10-page March 2017 Elliott Wave Theorist 100% FREE — but only for a limited-time. Read below for details.

Get a free issue of market legend Robert Prechter’s Elliott Wave Theorist now

Read this eye-opening issue now and you’ll get a clear picture of what’s next for stocks, bonds and oil and more to help you jump on opportunities and sidestep risk. This free issue (a $29 value) will show you Prechter’s unique outlook and give you a new perspective on the markets you won’t get anywhere else.

Free download from Robert Prechter – for a limited time.

This article was syndicated by Elliott Wave International and was originally published under the headline One Forecasting Tool Defied the Bull Market Skeptics. 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.

Trump Card was the Market’s Destiny

The “Trump Bump” Was in the Cards LONG Before Trump

How to breach limitations of conventional market forecasting

Get the Free Elliott Wave Tutorial

Learn how you can apply the Wave Principle to improve your trading and investing in this free 10-lesson tutorial. You’ll learn:

  • What the basic Elliott wave progression looks like
  • Difference between impulsive and corrective waves
  • How to estimate the length of waves
  • How Fibonacci numbers fit into wave analysis
  • Practical application tips for the method

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It’s been a tough time for the stock market bears.

You just have to look at these recent headlines:

  • U.S. stock futures hit fresh highs (Marketwatch, Feb. 20)
  • Stocks post best winning streak in 25 years (CNN Money, Feb. 16)
  • Stocks Continue Record-Breaking Run (Nasdaq.com, Feb. 15)

As a result, a prominent Canadian market participant has thrown in the towel (zerohedge.com, Feb. 17):

The CEO of Fairfax Financial … announced that he is covering his firm’s equity hedges after suffering a $1.1 billion net loss on its investments in Q4, and $1.2 billion for all of 2016.

But the financial pain hardly ends there. Look at this chart with comments from the Wall Street Journal (Feb. 16):

It is the buzz of Wall Street: a five-day, 15% plunge in a U.S. mutual fund whose bearish bets were undone by the S&P 500’s latest run to fresh records.

Many market commentators say stocks have been rising because of the new administration’s policies (Yahoo Finance, Feb. 20):

Much of the post-US election rally in the stock market has been attributed to President Donald Trump’s promises for tax cuts and deregulation.

But long before the election, Elliott wave price patterns already told our subscribers to prepare for a market rally.

Our just-published February Elliott Wave Theorist reviews several charts we published early in 2016. Here’s one of those charts along with commentary from the new Elliott Wave Theorist:

The January and February 2016 issues of The Elliott Wave Theorist, written as stocks were plunging in highly volatile fashion, called for a bottom and labeled the stock indexes as having finished A, B and C of wave (4), a corrective formation dating back to the high of 2015.

In other words, our analysis revealed that the market was starting the next leg up.


Get the Free Elliott Wave Tutorial

Learn how you can apply the Wave Principle to improve your trading and investing in this free 10-lesson tutorial. You’ll learn:

  • What the basic Elliott wave progression looks like
  • Difference between impulsive and corrective waves
  • How to estimate the length of waves
  • How Fibonacci numbers fit into wave analysis
  • Practical application tips for the method

Get Details and Instant Access

This article was syndicated by Elliott Wave International and was originally published under the headline The “Trump Bump” Was in the Cards LONG Before Trump. 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.

Elliott Waves in India’s Bull Market

India’s Stock Market: Nothing “Random” About It

Back in 2009 we made a bull market prediction for India’s stock market, and SENSEX. So far the bull market is still on track.
See how beautifully India’s 8-year long bull market follows a clear Elliott wave fractal pattern

Every day, the mainstream financial experts attempt to explain away fluctuations in stock market trends with some “fundamental factor” du jour, all of which boil down to this: good news causes a market to rise and bad news — to fall.

Problem is, sometimes the experts end up using the same “fundamental” to justify the market’s upward AND downward moves. A Recent case in point, from South Asia:

“Sensex Down 324 Points as U.S. Picks Donald Trump as President.”

VERSUS

“Sensex Makes Recovery Amid Donald Trump Win.”

How can the same event — the election of Donald Trump — be bullish AND bearish for India’s stock market? You might as well say that it moves at random, as most people do.

But before you join them — consider that there may be something other than “fundamentals” driving trends.

In the words of Ralph Nelson Elliott, the discoverer of the Wave Principle:

“The wild, senseless, and apparently uncontrollable changes in prices from year to year, from month to month, or from day to day link themselves into a law abiding rhythmic pattern of waves…

“Current news and political developments are of only incidental importance, soon forgotten.”

Elliott saw the fractal, a pattern that repeats in form but not in time or amplitude, as the overriding design of all stock market progress and regress. This diagram shows you the Elliott wave fractal’s idealized development and subdivisions:

As for a real-world example of the Elliott wave fractal formation in stock markets, investors need only look at the last eight years in India’s bellwether Sensex index.

From the beginning, in 2008, the Sensex was mired in a bearish slump, with the market circling the drain of a three-year low, having plummeted 50% from its December 2007 peak to below the 9000 level. But instead of focusing on the doom and gloom on Dalal Street (India’s Wall Street), our analysts honed in on a telltale pattern unfolding directly on the Sensex’s price chart.

Here, our November 2008 Asian-Pacific Financial Forecast featured a special section on India and wrote:

“The Wave Principle teaches that the stock market is a self-similar fractal. That means that some pieces of its price record — which Ralph Nelson Elliott called waves — resemble other pieces elsewhere in that record. The weekly chart of India’s Sensex shows just such an example.

“Notice how the up-down sequence labeled Intermediate waves (1) and (2) (in the small red box) is a microcosm of the larger up-down sequence from the 2003 low to the present (i.e., waves 1 and 2, in the large black box). In both cases, the wave-two correction retraced approximately 50% of the wave-one advance.

“If we have identified this ‘nested fractal’ relationship correctly, it means that Indian stocks are about to begin Primary wave 3 of the bull market that began in 2003.”

From the point of that 2008 forecast, the Sensex more than doubled in value before hitting the breaks and turning sideways in early 2011. After a year, the December 2012 Asian-Pacific Finanical Forecast said the uptrend was about to resume:

“Conventional observers may say that the social malaise and political gridlock at present make a bull market in India unlikely. Elliotticians and socionomists, however, know that those conditions are merely lagging results of the corrective period of the past two years. They are also precisely the kind of conditions in which major advances begin. In fact, as Indian stocks now advance in wave (3) of 3 of III, India’s future looks brighter than ever.

Indeed, from there, the Sensex took off like a rocket in its most powerful bull-market phase ever, soaring to an all-time record high above 29,500 on March 3, 2015.

India’s 8-year long bull market isn’t an exception to the mainstream “random” walk model. It’s the rule for all liquid financial markets across the globe, where collective investor psychology creates trends big and small — regardless of news and events.


Learn Why the Elliott Wave Principle Works

Watch the Elliott Wave Crash Course. Stop reacting to news and fundamentals events. This free, 3-part video series provides a solid basis for why you should use Elliott analysis for your trading and investing decisions.

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This article was syndicated by Elliott Wave International and was originally published under the headline India’s Stock Market: Nothing “Random” About It. 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.

Charts and Politics

3 Killer Charts, 2 Fast Looks at Politics

Global Market Perspective is Your Roadmap to Global Investment Opportunity

Covering more than 40 markets on 50-plus pages each month, Global Market Perspective prepares subscribers for opportunities around the world. Get the latest forecasts for U.S., Asian-Pacific and European stocks and economies, global currencies, bonds, crude oil and more. Learn More about Global Market Perspective

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If you’re not ready to subscribe, this free report is a great place to start learning about the Wave Principle.

Unleash the power of the Wave Principle

Much like a great sports play; to appreciate a great market forecast, you have to see it. In fact, we’d like to show you four. Our examples do indeed show what can happen when Elliott analysis meets opportunity. But we’re not asking you to attend a class in ‘good calls.’ In each of these four markets, the unfolding trends have (once again) reached critical junctures. You really, really want to see what we see, right now. Get your report — How to Find Real Opportunities in the Markets You Trade — FREE


This article was syndicated by Elliott Wave International and was originally published under the headline 3 Killer Charts, 2 Fast Looks at Politics. 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.

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.

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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!