Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Stocks: Will The Bears Relinquish Control?

Stock-Markets / Elliott Wave Theory Feb 10, 2010 - 12:24 PM GMT

By: EWI

Stock-Markets

Best Financial Markets Analysis ArticleIn case you were hiding out Tiger Woods' style far away from the mainstream media during the past month, let me be the first to say: January saw an abrupt end to the U.S. stock market's record-setting winning streak. Last count, the Dow Jones Industrial Average plummeted 4% in its worst monthly loss in a year.


And, according to one Feb. 1, 2010, MarketWatch story, "The time to consider an exit strategy" has officially arrived. Here, the article captures the public's astonishment turned acceptance of the Dow's boom-to-gloom shift:

"The Dow has shocked the bulls out of their complacency. After all, analysts were looking for the bull market to last until at least the second half of the year. Investors were not prepared for such a sharp decline and now at least some of the chatter has gone from 'how high will the market go?' to 'how low will it fall?' [emphasis added]" Let me get this straight. The powers that be say it's time to "consider an exit strategy" -- AFTER the Dow has already plunged 700-plus points to land at its lowest level in two months. That's about as helpful as building a life raft AFTER your ship has begun to sink.

Let me get this straight. The powers that be say it's time to "consider an exit strategy" -- AFTER the Dow has already plunged 700-plus points to land at its lowest level in two months. That's about as helpful as building a life raft AFTER your ship has begun to sink.

Get a FREE 10-Lesson Tutorial on the Basics of the Wave Principle The Wave Principle is a powerful tool when used properly. This free tutorial gives you the foundation you need to put the power of Elliott to work for you. Learn more, and get your free 10-lesson tutorial here.

Then, those same sources go on to say investors were "not prepared" for the degree and depth of the stock market's decline. This is only partly true. On Main Street, the early January flood of bull-is-back-type headlines gushed in and washed all the bears away.

Yet, on our "Elliott wave" Street, preparation for a "sharp" decline in the Dow was fast in place. One week before the market turned down from its Jan. 19 high, Elliott Wave International's Short TermUpdate went on high bearish alert with this commanding insight:

"The Dow's diagonal remains in tact and its form is clear. We will afford the pattern a bit of leeway over the next one-two days... but the structure is very late in development. That means a trend reversal is fast approaching. A potential stopping range is 10,725-10,740. A close beneath [critical support] will confirm that the diagonal is over and the market has started a down phase that should draw prices significantly lower. Once a diagonal is complete, prices swiftly retrace to near its origin, which in this case is 10,263.90, the very first downside target." (Jan. 13 Short Term Update)

Soon after, the Dow peaked within four ticks of our cited upside target; next, it went on to fulfill the second part of its Elliott wave script with a staggering triple-digit slide to "near the origin" of the diagonal triangle pattern, and then some.

That leaves one question: Are the bears now ready to relinquish control of stocks? Don't wait for the market action to "shock" you.

Get a FREE 10-Lesson Tutorial on the Basics of the Wave Principle The first thing you should know is that the Wave Principle is not a black-box trading system. Elliott waves provide a context for past and present price action. Once you identify to the most likely structure of the pattern unfolding, you can then formulate a forecast for the future. The Wave Principle is a powerful tool when used properly. This free tutorial gives you the foundation you need to put the power of Elliott to work for you. Learn more, and get your free 10-lesson tutorial here.


Nico Isaac writes for Elliott Wave International, a market forecasting and technical analysis firm.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Trader
10 Feb 10, 15:41
Black Tuesday?

Nick what happened to the Black Tuesday that you were alluding to back in october 2009 ?

http://www.marketoracle.co.uk/Article17154.html

Never happened thats what !

NO credibility !

How many more times will the top be called ?


Former EWI subscriber
10 Feb 10, 21:09
How many times EWI called the tops and failed?

Bob Prechter called the top in August 2009, STU called the top in Sept. 09 and then in Oct. 09. How many tops they called and failed? No credibility at all!


Steven R. Lindlar
11 Feb 10, 03:04
EWI

Yes, its true EWI called many times in the last years for tops and bottoms. But this is normal. In the last years the way of trading has changed. The participants are more stupid than the years before.

How many sence does it make to buy Nasdaq Futures if its already up 3 % within a day? But the buy! Same in the other direction.

20 Years ago trading was more simple. Example: Dow plus 100, sell a contract and you could gain a few bucks. But today? You will never know.

The same happens to EWI, we all are working with possibilities. If Steven Hochberg is predicting a high, he always givs Risk points. So what? You will be a fan or you will hate it, not more, not less.

But what about the others, predicting a dow of 20.000 points or forcing investors to buy Nikkeis at 40.000. Where there are now?

Each participant and trader has to find his own way to trade . No one can compare another. Thats the only Rule, and EW Theory is helpfull to determine turning points, thats true.

Good trading to all of you.

Steven


truthhurtsss
11 Feb 10, 05:29
a broken clock tells the time correct twice a day...

"Yet, on our "Elliott wave" Street, preparation for a "sharp" decline in the Dow was fast in place."

Blah, blah, blah......

Of course if you keep calling for a drop months after months, years after years(remember the call for a Depressional drop in 1987 until now?), one day you will be right. Even a broken clock can tell the time correct twice a day......



11 Feb 10, 08:56
ew

they are highly biased All they feed us are their biases in the name of this nonsense theory


Post Comment

Only logged in users are allowed to post comments. Register/ Log in