Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market's Character Has Changed -- Here's How

Stock-Markets / Stock Market 2023 Sep 06, 2023 - 09:24 PM GMT

By: EWI

Stock-Markets


We're watching the VIX or "fear index" to see what's next

Stock market investors naturally want to know the closing numbers for the main stock indexes at the end of each trading day.

Yet, it's also good to dig deeper.

Let me show you some examples of how the U.S. Short Term Update, a thrice weekly Elliott Wave International publication which covers near-term trends of key U.S. financial markets, does just that.


Let's start off with a quote from the Aug. 21 issue:

NYSE down volume outpaced up volume 52.7% to 47.3%. Internally, today's rally in the S&P and NASDAQ was meek.

Here's a review of a revealing indicator from the Aug. 16 U.S. Short Term Update:

The NYSE a/d ratio has closed negative or flat for seven straight days. It's the longest streak in nearly a year, since August 26, 2022 to September 6, 2022. The 10-day NYSE a/d ratio closed yesterday (Aug. 15) at .80, which is the most negative also since September 2022.

Another observation of the market's internal dynamics was mentioned by the Aug. 9 U.S. Short Term Update:

The VIX made a closing low on June 22 and failed to confirm the S&P's higher price extremes. That was an initial warning sign that market participants were becoming a bit more fearful and expecting a pickup in market volatility.

So, it appears the character of the stock market has changed.

These negative indicators are in stark contrast to measures of stock market sentiment during the past several weeks, some of which reached bullish extremes.

For example, consider the Advisor and Investor Model (AIM) from SentimenTrader.com. That's a blend of over 50 sentiment readings from five different sources, including Market Vane and Consensus Inc., two of the oldest services.

The August Elliott Wave Financial Forecast, a monthly publication which analyzes major U.S. financial markets, provides some insights:

This comprehensive model hit a new 3½-year extreme of 0.99 on July 25. The extreme during the topping process was a reading of 0.96 on April 16, 2021, which occurred as the most speculative issues completed their tops.

Indeed, as recently as Aug. 14, none other than Nasdaq.com had this headline:

Reasons to Still Believe In This New Bull Market

In Elliott Wave International's view, the S&P 500 index never entered a "new bull market" since the January 2022 top and the subsequent downturn. Yes, there's been a rally since that first leg down, but the January 2022 peak has not been breached.

The stock market's Elliott wave structure puts that rally into context.

If you'd like to delve into the details of Elliott wave analysis, read Frost & Prechter's book, Elliott Wave Principle: Key to Market Behavior. Here's a quote from this Wall Street classic:

Although it is the best forecasting tool in existence, the Wave Principle is not primarily a forecasting tool; it is a detailed description of how markets behave. Nevertheless, that description does impart an immense amount of knowledge about the market's position within the behavioral continuum and therefore about its probable ensuing path. The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market's general position and outlook. At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable.

If you'd like to read the entire online version of the book, you may do so for free once you become a member of Club EWI, the world's largest Elliott wave educational community.

It doesn't cost anything to join Club EWI. Even so, members enjoy free access to Elliott wave resources on financial markets, investing and trading. New resources are regularly added and some videos and articles are from Elliott Wave International's analysts. All the while, Club EWI members are under no obligations whatsoever. So, you have nothing to lose and a world of Elliott wave education to gain!

Elliott Wave International stands ready to welcome you as a new Club EWI member. Just follow this link and you're on your way: Elliott Wave Principle: Key to Market Behavior -- get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Stock Market's Character Has Changed -- Here's How. 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.


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


Post Comment

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