Friday, July 18, 2008 12:40:04

 

Jay DeVincentis's

 

 

 

 

The Most Important Investment Report You'll Read in 2008 

In January 2007, our friends at Elliott Wave International issued a special report called "2007: The Year of Financial Flameout." The forecast in that report has largely come to pass. This year, they’ve delivered a NEW, up-to-date special report entitled "2008: The Year Everything Changes."

The Most Important Investment Report You'll Read in 2008 is yours free when you take 30 seconds to join Club EWI, also FREE. Goto Elliott Wave International



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About Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.

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18.07.2008

 

 

 

Media

 

Save 58% on three months of forecasts when you subscribe to the Financial Forecast Service.

ACT NOW: This Limited-Time Offer Expires Friday, June 27, when the NEW July 2008 Elliott Wave Financial Forecast is published.

 

Elliott Wave Principle:

Why "Three Waves Up" Are So Important

The following example of real-live market behavior shows the importance of identifying "three waves"

© ELLIOTT today, July 12, 2008

 

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Börse in Karachi nach Kurssturz verwüstet Anhaltende Verluste an der pakistanischen Börse haben zu gewaltsamen Protesten von Anlegern und Händlern geführt. Der Leitindex ist seit Tagen auf einer dramatischen Talfahrt.FTD, July 18,2008





Bauboom beendet
Spanischer Immobilienriese insolvent
Platzt die Blase in Spanien? Nach hohen Verlusten auf dem Aktienmarkt hat die Immobilien-Gesellschaft Martinsa Fadesa nun Konkurs angemeldet - und das Land steht vor einer der größten Firmenpleiten seiner Geschichte. FTD, July 15, 2008

Markets Rally as Financials Surge
July 16, 2008 
A frenzied comeback in financial stocks and a second straight plunge in oil prices drove stocks sharply higher Wednesday, as traders and analysts grew confident that the market's latest bout of credit-related jitters may be over. Read more>>>

 

Ölpreis fällt in Riesentempo

In den Vereinigten Staaten sind die Ölvorräte größer als gedacht, zeigen die neuen Lagerdaten.Diese Nachricht drückte den Ölpreis kräftig. Binnen weniger Minuten stürzten die Notierungen um mehrere Dollar ab. Auch der Goldpreis fiel. FTD, July 17, 2008





SEC Moves to Curb Short Selling
The SEC said it will move to curb short selling in the stocks of Fannie Mae and Freddie Mac, as well as in 17 financial firms. The emergency action comes amid concern that negative bets against the stocks might be exacerbating financial-sector woes, but it's far from clear whether the move, which sparked a barrage of criticism, will curb the activity of short 
sellers. WSJ, July 16, 2008



Europe's Economy Takes a Hit 
Just a few weeks ago, Europe thought it could escape the worst of the global slowdown. Now it looks like the euro zone, the world's second-largest economy, is headed for a hard landing and perhaps recession, compounding growth troubles around the world. WSJ, July 16, 2008

 

 

 

Krisenbank IndyMac: Tausende Anleger heben ihre Bar- Reserven ab
Anlegerpanik in den USA: Vor der IndyMac-Zentrale standen Kunden stundenlang an, 
um ihre ihre Konten leer zu räumen.
Die Bank hatte am Montag mitgeteilt, man werde keine neuen Kreditanträge mehr annehmen und 3800 Arbeitsplätze abbauen. Spiegel de., July 15,2008

 

Wall St down as Fannie and Freddie sell off
US stocks slumped as investors rushed to sell Fannie Mae and Freddie Mac on speculation that a government bail-out could wipe out shareholders while oil prices spiked above $147, pummelling consumer-facing stocks - FT, July 12, 2008



US hopes of housing recovery subside Hopes that the beleaguered US housing market may be in the early stages of a recovery were dented after an index of pending home sales recorded an unexpectedly steep 4.7 per cent
drop in May . FT, July 12, 2008



Sharp fall in US private sector jobs The US suffered the largest drop in employment in nearly six years in June in a sign of the deteriorating economic environment, says the monthly ADP survey . FT, July 12, 2008

June Is Cruel to Big Names As Prentice, Tosca Get Hit 
The June stock-market rout has battered two high-profile hedge funds. WSJ, July 11, 2008

 

Bankenaufsicht schließt kalifornische Hypothekenbank
Größter Banken-Crash in den USA seit 1984: Die US-Aufsichtsbehörde hat die kalifornische Hypothekenbank IndyMac in Folge der Kreditkrise geschlossen. Experten rechnen mit einem Schaden in Höhe von bis zu acht Milliarden Dollar. Spiegel.de, July 12, 2008



Fannie, Freddie Stay in Spotlight

Treasury Secretary Paulson is insisting that any potential rescue plan for Fannie Mae and Freddie Mac not benefit the companies' shareholders. Shares of Fannie and Freddie fell 22% and 3.1%, respectively, and the two face a crisis of confidence after a week in which their stocks lost nearly half. WSJ, July 12,2008



Mortgage Twists Shake Up Stocks
The Dow Jones industrials tumbled below the 11000 level for the first time in two years but finished down 128.48 points at 11100.54, as questions continued to swirl around Fannie Mae and Freddie Mac. Crude oil rebounded sharply. WSJ, July 12,2008



U.S. May Trade Gap Shrinks; Import Prices Surged in June 

The trade deficit shrank unexpectedly in May as the U.S. bought less oil and exports increased. The news prompted a bit more optimism in the outlook for economic growth for this year, but separate reports showed that consumers remain gloomy and import prices continue to soar. WSJ, July 12, 2008



Bankencrash schockt Amerika

Wer nach einigen ruhigeren Monaten gedacht hatte, die US-Finanzkrise sei mittlerweile unter Kontrolle, sieht sich arg getäuscht: Die halbstaatlichen Hypothekenbanken Freddie Mac und Fannie Mae, Säulen der amerikanischen Immobilienfinanzierung, muss die Regierung 
retten, und jetzt ist ein weiteres Geldhaus gar zusammengebrochen. Stern.de, July 12,2008



Kalifornische Hypothekenbank kollabiert

Die US-Aufsichtsbehörden haben die Bausparbank IndyMac geschlossen, weil zu viele besorgte Kunden ihre Einlagen zurückhaben wollten. In den USA ist das der größte Banken-Crash seit 1984. FTD, July 12,2008 


Abschied vom SUV 
Zehn Tränen für Geländemonster 

Steigende Benzinpreise läuten einen Sinneswandel unter den Käufern der größten Automobile ein: Die Ära der SUVs geht zu Ende. Stern.de, July 12,2008

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U.S. Consumers Trade Down As Economic Angst Grows 

Spurred by economic worries, American shoppers have quickly decided that cheaper is better. They are trading down to store brands from fancy labels, to small cars from SUVs, and to deep-discounters from full-service stores. WSJ, July 11, 2008

 

Bear Has S&P 500 in Its Paw

The S&P 500 tipped into bear-market territory and the Dow industrials dropped by 236.77 points , or 2.1%, to finish at 11147.44, as a late swoon in the financial sector punctuated a selloff sparked by anxiety about earnings and the economy. Freddie Mac and Fannie Mae shares plunged for the second time in three days. WSJ, July 10,2008



Die Big Three am Abgrund
Sinkende Verkaufszahlen, schrumpfende Marktanteile, fallende Aktienkurse - 
GM, Ford und Chrysler stecken in der größten Krise ihrer Geschichte. FTD, July 10,2008

Chinas Automarkt kühlt sich ab
Nach einem Jahrzehnt raschen Wachstums steht Chinas Automobilmarkt vor einer Verschnaufpause. FTD, July 10,2008



Rezessionsangst
Die Rückkehr des R-Worts

Nach der Serie schlechter Konjunkturdaten in den vergangenen Tagen halten es Experten erstmals seit Jahren wieder für möglich, dass die deutsche Wirtschaft in eine Rezession abgleitet. FTD, July 10,2008 

 

Depression am Aktienmarkt

Die globalen Aktienmärkte rutschen immer tiefer in den Abwärtsstrudel. FTD, July 9,2008



Oil Sees Biggest Drop Since '91
Crude-oil futures fell $5.33 to $136.04 a barrel, their largest single-day drop in dollar terms since 1991, as investors confronted with economic turmoil 
cashed in on last week's highs. WSJ, July 9, 2008

 

Dow Closes a Wild Day in the Red
Selloff in Fannie, Freddie Stings Financials 
As Markets Look Ahead to Earnings Season
July 7, 2008 .
A fresh dose of trouble in the financial sector roiled the broader stock market, which ended on Monday with a modest loss that belied deep-seated anxiety lingering among investors as second-quarter earnings season approaches.The Dow Jones Industrial Average, which was up nearly 111 points at its morning high and down nearly 168 points at its afternoon low, finished with a loss of 56.58 points at 11231.96. All its financial components ended lower, 
led by Bank of America, down nearly 4%. The industrials are have now fallen 15% on the year and are still firmly in bear market territory, down by 21% from their high in October. WSJ, July 8, 2008





Fannie, Freddie Take Beating
Fannie Mae and Freddie Mac shares dropped to their lowest levels in more than 14 years, as concerns about their capital position increased. WSJ, July 8,2008

 

Commodity Prices 
and Inflation: 
What's the
Connection? Goto>>>

 

"Topping"  vis "Out of the Channel"

DAX, January 4, 2008 vis DAX, July 4, 2008 [Charts>>>]

 

GOLDMAN- SACHS- STUDIE
Europäischen Banken fehlen mindestens 60 Milliarden Euro
Spiegel de., July 4, 2008

 

Dow, Nasdaq Enter Bear Market After a Late Selloff Seizes Stocks 

...The Dow Jones Industrial Average enjoyed brief rallies in morning trading
but ended down by 166.75 points at 11215.51, down 20.8% from its record 
close in October. Traditionally, a fall of 20% from a high is considered the definition of a bear market." WSJ, July 2,2008

 

Hypothekenkrise
England im Abwärtsstrudel

Großbritannien hat die Kreditkrise voll erwischt. Die Hauspreise fallen, die Verbraucher halten sich mit Ausgaben zurück. Die Aktien von Marks & Spencer und Taylor Wimpey stürzen zweistellig ab. FTD, July 3,2008



US-Automarkt - Anfang eines Endes

Was sich da über dem amerikanischen Automarkt zusammenbraut, ist der perfekte Sturm. Die US-Konjunktur schwächelt, und die Kauflust der Konsumenten ist gebremst. FTD, July 3,2008

 

Deutsche Autobranche
Hersteller und Händler vor harten Zeiten

Inflation und Ölpreisrekorde verhageln den deutschen Autoherstellern das Geschäft. Die Verkaufszahlen könnten bald unter die Marke von drei Millionen sinken. Es gibt erste Anzeichen dafür, dass sich die Händler für eine lange Krise rüsten - kurioserweise mit geringeren Rabatten. FTD, July 2, 2008

Market Dispatches 6/30/2008

A terrible June finally ends

Late selling saps a rally as the Dow finishes with its worst June since 1930. Crude oil tops $143 but falls back to $140. Energy and metals stocks give the market a boost; techs and financials are weak. Chrysler will cut back production of minivans.

 

EU
Kaczynski legt Lissabon-Vertrag auf Eis

Einen Tag nachdem der deutsche Bundespräsident die Ratifizierung des Reformvertrags von Lissabon vorerst verweigert, hat auch Polens Präsident Lech Kaczynski eine Unterschrift als "sinnlos" abgelehnt. FTD, July 1,2008


June 30, 2008

The Picture of a Credit Crunch
by Paul Kasriel
http://www.safehaven.com/article-10651.htm

 

June 30, 2008

Deflationary Hurricanes to Hit U.S. and U.K.
by Mike Shedlock
http://www.safehaven.com/article-10652.htm

 

Slowdown Squeezes Vegas Casinos

The gambling slowdown that began early this year is taking a serious toll on Las Vegas. Casinos are being pinched by less access to cash as they grapple with predownturn expansion plans and billions of dollars of debt. WSJ, July 1,2008




Lehman Shares Fall 11%
Lehman's shares tumbled 11% to their lowest level since 2000 on speculation that the investment bank is in trouble, including possibly having to sell itself. WSJ, July 1,2008

Lost in Las Vegas

Immobilien

Montag, 23. Juni 2008

Mit Trockenheit kennt man sich in Las Vegas aus. Doch mit der Kreditkrise sind jetzt auch die Geldströme verdunstet. Das Tropicana hätte bis 2010 zur weltgrößten Casino- und Freizeitanlage ausgebaut werden sollen, muss jetzt aber Gläubigerschutz beantragen. Dies wirft ein schiefes Licht auf die Kredite von Geschäftsliegenschaften, welche wie Subprime-Hypotheken rund um den Globus verschachert wurden http://blog.zeitenwende.ch/

 

 

GM Stock Crashes on Goldman Downgrade

Faced with a potential cash shortage, General Motors crashed yesterday to close at its lowest price since the dark days of 1974. Chart>>>

 

Israel droht mit Militärschlag gegen Iran
Israel schließt einen Angriff auf iranische Atomanlagen nicht aus. "Wenn nötig, werden wir Gewalt anwenden", drohte Generalmajor Isaak Ben-Israel, Abgeordneter der regierenden Kadima-Partei, in einem SPIEGEL-Interview. Spiegel de., June 28,2008

 

June 26, 2008
When Central Bankers Clash, Stock Markets can Crash
by Gary Dorsch
http://www.safehaven.com/article-10607.htm

 

Corporate Scandal
Did the Enron scandal discourage investors? No, discouraged investors precipitated the Enron scandal. Many readers undoubtedly will balk at accepting the principle behind the above formulation without their own tedious process of induction  via repeated examples. Socionomics Insight>>>

 

Blues From Goldman
Reuters.com, June 27,2008

Verkaufspanik erfasst den Dax

Der deutsche Aktienmarkt verliert mehr als 110 Punkte und fällt damit auf den tiefsten Stand seit März. Ein stark gesunkener GfK-Index belastete die Stimmung. FTD, June 24,2008

 

Scientist predicts a reversal 
of the trend toward globalization

Dr.John L.Casti's presentation at the Cycles and Patterns
in Business and Finance Conference depicted and expanded upon
Elliott Wave International's forecast of a reversal in the trend toward
globalization. He explained that as the global mood turns increasingly
negative and nations grow more antagonistic toward one another, 
globalization will wane as trends toward protectionism and nationalism
take over. http://www.socionomics.net/index.aspx

Socionomics>>>

 

 

Konjunkturklima
Ifo-Index knickt ein

Schlechte Stimmung in den Chefetagen der deutschen Wirtschaft: Der Ifo-Geschäftsklimaindex ist im Juni unerwartet deutlich gesunken. In ersten Reaktionen auf die Zahlen zeigen sich die Experten jedoch gelassen. FTD, June 23,2008

The FED Follows 
    The Market
  http://yelnick.typepad.com/yelnick/

 

"Dude, where's my average?" - The DJIA: 112 years on 

Another classic example how Median Lines & Fibonacci Fanlines work together. This is a powerful tool to analyze markets behavior and market direction. (From the weeklyUPdate, elliott-today, May 30,2008)

 

 

 

Making History: 
An Interview with Film Director 
David Edmond Moore

David Edmond Moore of Eyekiss Films in Atlanta recently completed a documentary on socionomics titled History's Hidden Engine, which is freely available for viewing or download at www.socionomics.net/films/history/. 

 

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07/18/08

 

Forex Traders' Alert. On April 25, 2008, Elliott Wave International, the world's largest market forecasting firm, released a unique, free 20-minute video with tips on how to trade currencies using Elliott wave analysis. The video also includes a supplemental 4-page report demonstrating how wave analysis can be used to trade forex at the time of economic news releases. Both the free video and report are available online now. Get them both now, free.

Join Club EWI to gain access to your Forex video and report, FREE! It takes just 30 seconds. Club EWI is the world's largest Elliott Wave Community with more than 125,000 members. It only takes a minute to sign up and it's absolutely free.

 

Gold, the Dow, T-Notes: Which Does Best During Recessions?

By Susan C. Walker, Elliott Wave International
April 11, 2008

Each year, the NCAA college basketball tournament winnows its starting field of 64 teams to the Final Four teams who play for a chance to become the national champion. Congratulations to the University of Kansas and the University of Tennessee, this year's men's and women's basketball champions.

The structure of the NCAA tournament got me to thinking. Wouldn't it be great if we could set up brackets for our own investments the same way – start with 64 equities, bonds, mutual funds, commodity futures, metals, etc. Then let them duke it out against one another to see which ones emerge as the "Investment Final Four"?

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Click here to download a free 5-page report from Elliott Wave International with even more information on which investment does best during recessions. The report, excerpted from Bob Prechter's Elliott Wave Theorist, includes in-depth historical analysis and six eye-opening tables.

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Since most of us have neither the time nor the money to act as our own version of the NCAA (which might stand for the "National Coordinator of Asset Allocation"), it's worth knowing that Bob Prechter of Elliott Wave International has already set his mind to the task. He has specifically explored which investments do best in times of recession and which do best during economic expansions. But instead of starting with a field of 64 investments, he researched the three most popular investments – gold, the Dow, and Treasury bonds. We can call them the Treasured Three, rather than the Final Four.

Gold and Recessions

Since economists and even Ben Bernanke, chairman of the Federal Reserve, now admit that it looks like the U.S. economy has entered a recession, many people may wonder whether they need to change the mix of their investments. In particular, as some prices keep going up – notably for food and gas – the threat of inflation makes people more interested in gold as an investment, since it's usually seen as a bulwark against monetary inflation.

It is this conventional wisdom that piqued Prechter's curiosity. He wanted to find out whether it would hold up to a reality test. As he writes in The Elliott Wave Theorist, "I have often read, 'Gold always goes up in recessions and depressions.' Is it true? Should you own gold because you think the economy is tanking? Whenever we hear some claim like this, we always do the same thing: We look at the data."

So he and another Elliott wave analyst ran the numbers, reviewing the behavior of these three key investments during recessions following World War II, from February 1945 through November 2001. This is what they learned:

Gold was not the best investment during recessions in terms of total return.

The winner of this tournament was actually Treasury Notes, which had a total return of 9.96%. In contrast, gold had a total return of 8.80%, and the Dow came in at 6.89%. But that's not all – once they figured in the transaction costs for each investment (at a 2008 level), gold fell from second to third place as a worthwhile investment during recessions. The total returns with transaction costs came out this way:

1. T-Notes	9.82%
2. Dow	6.85%
3. Gold	4.80%

This result turns conventional wisdom on its head. It's also worth being aware of as you invest in 2008. Here's how Prechter sums up the results:

The Best Investment During Recessions

The most important question, however, is not whether the Dow beat gold or vice versa but whether making either investment would have been better than taking no risk at all. Table 3 [see free report provided by Elliott Wave International] shows that ten-year Treasury notes beat both gold and the Dow during recessions since 1945, and they did so far more reliably. T-notes provided a capital gain in 10 of the 11 recessions, and of course they provided interest income during all of them. And the transaction costs are low….

So if you want to make money reliably and safely during recessions and depression, you should own bonds whose issuers will remain fully reliable debtors throughout the contraction. Of course, as Conquer the Crash [Editor's note: Bob Prechter's best-selling business book] makes abundantly clear, finding such bonds in this depression, which will be the deepest in 300 years, will not be easy. Conquer the Crash forecast that in this depression most bonds will go down and many will go to zero. This process has already begun. This time around, you have to follow the suggestions in that book to make your debt investment work. [The Elliott Wave Theorist, March 2008]

Susan C. Walker writes for Elliott Wave International, a market forecasting and technical analysis company. She has been an associate editor with Inc. magazine, a newspaper writer and editor, an investor relations executive and a speechwriter for the Federal Reserve Bank of Atlanta. Her columns also appear regularly on FoxNews.com.

 

GOLD...

"Approaching The Top..."
ELLtoday, Jan 12,2008

 

 

 

Chart of January 12,2008

 

 

Sell Gold!...or Buy It 
By Eric Fry 

In 1999, gold was friendless…and "ghetto fashion" was still very "ghetto." In 
2008, gold is as popular as the iPod…and rich teenagers all over Southern 
California wear oversized jeans around their ankles. When edgy trends become 
too popular they aren't so edgy anymore, and they often die a sudden death. 
So all we sayin', yo, is that maybe gold has become a bit too popular for its 
own good…at least for the moment. You down? 

Gold's price has been soaring recently, and so has its popularity, especially 
among the "Speculators" in gold commodity futures. According to the latest 
Commitment of Traders Report from the CFTC, the Speculators – also known as 
the "dumb money" – are holding a record-high, net-long position of 220,000 
gold futures contracts. For perspective, that's double the position this 
group held six months ago and four times the position they held two years 
ago. For additional perspective, the Speculators held their record-high, net-
short position on April 9, 1999, shortly before gold launched its dazzling 
run from $280 an ounce. 

 

From the Weekly Update, March 2,2008

Gold
March 02,2008

 

ELLIOTT today, March 2,2008 

Both Gold and Silver rallied further to new highs. Despite an overall extreme optimism toward the prospects for both metals still suggests that the advance 
is far closer to an end than a beginning. For instance, gold traders as well as commodity advisors have pushed to 97% bulls (DSI) and 93% bulls (Market Vane's Bullish Consensus), respectively. There is no question that investors 
are on-board the rally, and the extreme to which they believe in its 
continuation has historically led to a top. 

From the WeeklyUPdate:

Friday, Gold took a dive and fell dramatically.

"Last week Gold prices tried to climb higher but the advance did not act like the beginning of a third wave." ELLtoday, April 12, 2008

 

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Friedman and the Fed: 
Is Liquidity the Answer?

I recently heard a radio interview with a prominent economist who was defending Federal Reserve Chairman Ben Bernanke's moves to shore up the markets on Wall Street. Bernanke, the economist said with emphasis, had spent years studying the "mistakes" of the Fed during the Great Depression and was not going to repeat the "errors" that the Fed directors committed from 1930 to 1933. 
Ludwig von Mises Institut visit the Mises Blog, http://blog.mises.org/blog/

Kultur 
Amerikanische TV-Helden: 
Geliebter Fernseh- Fiesling
Ein sarkastischer Arzt, ein ultrabrutaler Cop, eine intrigante Anwältin, ein gehässiger Autor: Die großen Helden des amerikanischen Serienfernsehens werden immer gemeiner. Das Publikum aber liebt diese Medien-Fieslinge ganz besonders. Warum eigentlich? 

What Is Socionomics - The Socionomic Insight

"Elliott was the first person to relate stock cycles to the unthinking collective action of herds of investors. This revolutionaryidea is still unaccepted today by virtually all of our academic, corporate and government leaders. Every day our print and TV 
media attribute changes in stock prices to a real or imagined external event in our society.  These conclusions are wrong, completely wrong. Elliott and experts, who followed him, have proven conclusively that mass changes in social mood are the
cause of stock market cycles. External news events, even very major ones, have only a temporary effect on the stock market, sometime lasting only a few hours or a day." [Robert Gordon] Socionomics Insight>>>

Calling Reversals
for Public Icons 
on the Basis
of Extreme Events

Even though one may not have charts of superstars' waves handy, sometimes events are so extreme as to serve as a top signal. However, just because someone receives an award does not mean that this persona is peaking, and just because he is the subject of a negative article does not mean that this persona is bottoming. To serve as such a signal, an event must truly be an extreme social assessment of value.  

One major top in the DJIA was July 1990. That Year also brought Michael Jackson a record deal with Sony Corp.  And what happened to MJ in between? Socionomics Insight>>>>

 

Investor Psychology

No matter how riled the debt markets become or how close the economy
gets to an outright contraction, the belief in rising stock prices stays rigidly
in place. According to Investors Intelligence, the percentage of bullish 
advisers was greater than 50% for every week in December, even though 
the market was down for the month. "Despite widespread worry, the subprime
mortgage crisis and resulting problems in the credit markets," 
Wall Street analysts say that there will be no recession in 2008. "Instead, most strategists expect slower than-normal growth in the first half of 2008, followed by a pickup in the second half."

In a Newsday sample of strategists for eight major Wall Street security firms, the average forecast is for an 11.8% rise in 2008. "Even the most bearish strategist in the group recommends that investors keep a majority of their assets, 60% in equities. 

"Be Ready to Buy on the Word Recession," says a Wall Street Journal headline. "The biggest money managers are closing their eyes and buying," says Bloomberg. The article quotes a Dallas-based fund manager who tripled his holdings of Bear Stearns and is hanging on to interests in Merril Lynch, JP Morgan Chase & Co. and Citigroup. 

"This is close enough to the bottom," he says. "You may suffer for a while if you buy now, but then within one year, these stocks will outperform the market." (EWI, January 2008) Elliott Wave International

* ) No Recession, But 
Dec 26, 2007
For 2008, the economic outlook is Topic No. 1 for almost all investors. Stock prices and bond yields already reflect recession worries, but an actual downturn would hit portfolios hard. To help get a handle on what to expect, BusinessWeek asked 54 forecast ers in our annual outlook survey for their views on everything from housing and the credit crunch to Fed policy and global growth. 
Socionomics >>>

Bear Stearns' recent performance speaks volumes. The sentiment surrounding its plunge offers further insight into the depth of the delusion at a historic peak. Contrary to popular belief, it didn't happen all at once.  The 98%+ declline , from $172.61 to $2.84 took more than a year. Still, even sophisticated observers with ring-side seats to the debacle were caught off guard by its final two-day plunge from $57 to under $3. In the wake of the break, Bears' own economists said, "We were concerned about a run on the bank. We never imagined we would be the bank!" EWI, April 2008

 

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Before the Fact 

From the latest WeeklyUP:

Weekly Update © ELLIOTT today, March 29,2008

NASDAQ Composite Index
© ELLIOTT today, March 29,2008 

 

 

 

 

 

"The Elliott labeling shows a completed 5-wave-decline and therefore a completed downmove. The next weeks or so the market should produce a countertrend move (should be a three-wave structure). " 

 

The Media
Question from viewer to Jim Cramer, 
host of CNBC's "Mad Money":

"Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?"

Answer from Cramer on March 11, 2008:
"No! No! No! Bear Stearns is not in trouble. If anything, they're more likely to be taken over. Don't move your money from Bear."
FREE. Goto Elliott Wave International

Excerpted from The Elliott Wave Theorist
by Robert Prechter, October 2007

Why Are Investors Bullish on Stocks, Oil and IOUs, All at the Same Time?

Explain this: The last time there was this much optimism toward oil was 1973-1974, and the stock market was falling. This time, the stock market has been rising right along with oil, and the optimism toward stocks is also extreme, by some measures the most extreme ever. Read More>>>

 

Panic & Profit Taking  
Hit the Precious Metals

In an unusual conflux of events hitting Wall Street and the trading pits, precious metals are finding heavy selling pressure so far this week. Just when much of the market was anticipating a runaway continuation of the bull market, Bear Stearns crashed and burned. With a Federal Reserve bailout propping up the badly beaten investment bank through a proxy loan deal with JP Morgan bank, skittish investors fled financial stocks and dumped the dollar in fear of a systemic collapse of the American banking system.
FutureSource.com, Mar 20,2008

 

 

A TRACK RECORD OF WP APPLICATION 
TO THE STOCK MARKET Part I 


This essay by Robert R. Prechter, Jr. originally appeared in The Elliott Wave Theorist in December 2004. 

According to leading physicists and mathematicians who propose a fractal nature to financial markets, forecasting specific market developments is impossible. You can get an idea of this viewpoint from two quotations from eminent scholars in this area:Coastlines are good examples of random fractals. Stock prices are comparable to coastlines. 

—Edgar E. Peters (1991, p.51)

I agree with the orthodox economists1 that stock prices are probably not predictable in any useful sense of the term. 


—Benoit Mandelbrot and Richard Hudson (2004, p.6) Article>>>

 

 

For the first time in 25 Years, the Dow penetrated its own long term Cycle trendline to the downside! Think about it.  The main task of an Elliott analyst is to recognize when one pattern is ending, and therefore when the next is beginning. The most basic application of The Wave Principle rests with a recognition of completed forms and an understanding of the current position of the market within whatever pattern is then in progress. From that understanding, the analyst can list probably paths of the market, project to some degree price behavior and device strategy for profiting from the most likely outcomes while protecting against the less likely. With such knowledge and with these skills, the accomplished Elliott Wave analyst can , and does, beat the market. Source: Elliott Wave International

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Before The FACT !!

"Most economists still predict continued economic growth for the rest of the year and into 2008." 
This article is an excerpt from the Weekly Update of September 1,2007,
© ELLIOTT today, September 1, 2007 

 

Special Report

S&P 500 Index, daily:© ELLIOTT today, November 10 2007 

Panic Potential?

chart>>>

Everyone wants to know, "Is the worst over for stocks?" If you're familiar with Bob Prechter and his work, you won't be surprised that his short answer is "NO." But ... it's his long answer that is much more compelling, including insights into what you should be doing NOW to prepare for what's still to come. You just watched Bob’s short answer. For his long answer, you must join his free community, Club EWI. CLICK HERE TO JOIN NOW >>>

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6 Months ago:

Weekly Update, July 14,2007 :

DJIA - 5 Waves Up Complete !!

Elliott Wave Analysis, © ELLIOTT today, July 14,2007 

The new alltime-high in the DJIA touched the upper parallel of a longterm-parallel trend channel, when drawing that parallel from the low of wave 4. More important with regard to forecasting, one thing is clear, the contracting triangle for wave (iv) preceeds the final impulse, wave (v), completing Minor wave 5 and the entire structure dating back to October 2005. At the recent high, (13,932), the length of wave 5 equals the length of wave 1 in percent. Additionally, wave 3 is close to 0.618 (phi) of the length of waves 1 plus 5. With the housing sector in meltdown, valuations extended, upside market momentum waning, investor optimism high relative to historic norms, falling precious metals prices and a lagging CRB commodities index, the potential for a significant stock market decline remains extraordinarily high. The Investor's Intelligence percentage of bullish advisors hit a 6-month high of 56.7% as the DJIA made its June 1 high. Chart>>>

 

This article is an excerpt
from the Weekly Update
of September 1,2007
 © ELLIOTT today, September 1, 2007 


Please pay special attention to the phrase:   

"Most economists still predict continued economic growth for the rest of the year and into 2008."  

 

And here is the latest news from the economy-front:

"U.S. Industrial Output Unexpectedly Falls on Slowing Auto, Appliance Sales Industrial production in the U.S. unexpectedly dropped in October as slowing sales prompted factories to make fewer automobiles and appliances." Bloomberg, Nov 16,2007

 

and from the Weekly Update, 

"Within the current list of clues in the wave structure, momentum indicators and sentiment measures the NASDAQ Composite is about to top out NOW or has already.  It's screaming SELL !" ELLtoday, Oct 13,2007 

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You read it here first: "The C-Word" [Crash]

Rezessionsangst lässt Börsen einbrechen

Es war ein rabenschwarzer Tag für die Anleger: Weltweit stürzten die Börsen ab wie seit den Terroranschlägen 2001 nicht mehr. Der Dax verlor mehr als 7 Prozent an Wert. Experten sind ratlos - waren die Verluste "Panikreaktionen" oder geht der Crash weiter? Spiegel.de, Jan 22,2008 




MARKETS CRASH ACROSS EUROPE
Experts Warn of Stock Market Hysteria
Markets crashed all across Europe Monday, with Germany's DAX losing 7 percent of its value. But analysts advise against panic -- in fact, they say, now might be a good time to pick up some cheap stocks.

Five percent, 6 percent, 7 percent: For the German DAX stock market index, Monday was a day of steep falls. A €1 billion loss at the bank WestLB, combined with the fears of a global recession, helped push the DAX beneath the psychologically important 7,000-point mark. 

One Year Ago....

From January 27,2007

Davos Elite Brushes
Off Policy Makers'
Warnings of End to Boom

Bankers, investors and executives last week arrived at the Swiss resort 
of Davos giddy about record profits and bonuses. After five days of hectoring 
by policy makers that they are too complacent, they left just as happy.
"The mood has been totally upbeat,"   the chairman of India's largest mobil phone operator said, "I've never seen a mood
like this." 

Warnings by central bankers were batted away by dealmakers like Michael Klein of Citigroup, and David Rubinstein at the Carlyle Group Inc. buyout firm. They were confident in their ability to cope with the inevitable slowdown. (Bloomberg, January 27,2007), Elliott Wave International

 

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USA IN WECHSELLAUNE
Republikaner kapern Obamas
"Project Change"
Change, Change, Change: Bei den Republikanern zeichnet
sich immer noch kein Favorit ab-Spiegel.de, Jan 8,2008

 

Understanding the Engine of Social Trends

New York, Sept 11 (Bloomberg) - The attacks on the World Trade Center and Pentagon today are the worst acts of terrorism ever on U.S. soil and change the scope of foreign policy, experts say. Never before has a large scale terrorist attack on the U.S. been coordinated successfully in more than one U.S. city. At this point, no organization has taken responsibility."It's just an attack of extraordinarily sophisticated planning," said Michaeal R. Fishbach, a professor of history specializing in the Middle East at Randolph-Macon College in Ashland, Virginia. "The world that we know has now changed." "Americans' whole attitude about daily life, about foreign policy will be forever changed," Fishbach said. (The Elliott Wave Theorist, September 11, 2001) Read more

"The world that we know has changed" is a correct statement, but it did not change "now." It changed between January 14 and March 24, 2000, a two-month period during which the three major U.S. stock indexes signaled the end of a Grand Supercyle uptrend that had been in force for 216 years. We are only now beginning to feel the lagging results of that change. (The Elliott Wave Theorist, September 11, 2001) 
Socionomics (War)>>>

 

 

A Documentary About What Really Moves Markets Socionomics Chart>>>

 

Political Freedom
as a Function
of Worldwide Social Mood

Note the general parallelism. This relationship suggests that advancing waves tend to lead to political freedom, while retrenchement tend to lead to political repression. As social mood becomes positive, more territory moves from dictatorship to representative government. As social mood becomes more negative, more territory falls to dictators. 
(The Wave Principle of Human Social Behavior, 1999, Robert R.Prechter)

 

The Fall of (A) World Hero(s) 
Socionomics>>>

 

 

"Elliott Wave Commentary Article(s)" 

Suddenly, It's a Bleak Midwinter
for Housing and Lending

By Susan C. Walker, Elliott Wave International
January 7, 2008

In the bleak midwinter,
Frosty wind made moan,
Earth stood hard as iron,
Water like a stone…
(From "A Christmas Carol" by Christina Rossetti)

Shawn Colvin sings a beautiful song based on this poem by Christina Rossetti, reminding us of the bleakness of midwinter. That is exactly where the housing market seems to be now – facing its very own bleak midwinter of falling prices, rising mortgage rates and growing inventories.

The latest report of the S&P/Case-Shiller home price index shows that the price of houses fell 6.7% in October, year over year. That is the largest year-to-year decline drop since April 1991. Think of it – if you had bought a home for $300,000 in October 2006, it is now worth about $280,000. And suppose you just got a new job and need to move? You are going to have trouble selling it at that price, too, thanks to so many foreclosed homes on the market. One realtor in Phoenix explained to a Wall Street Journal reporter that local residents are now competing with foreclosed homes selling for $50,000 to $100,000 less than other houses on the market. "The sellers now are having to reduce their prices by 20% to 30% to compete," she says. (Wall Street Journal, "Pace of Decline in Home Prices Sets a Record," 12/27/07)
Full article>>>

 

Subprime Delivers One-Two Punch
Just Like Hurricane Katrina Did

By Susan C. Walker, Elliott Wave International
November 29, 2007

The world is awash in bad news about the subprime mortgage meltdown, just the same way that New Orleans was awash in floodwaters from Hurricane Katrina two summers ago. A few examples:

• The median price for new home drops 13% since last year, the most in 37 years, according to a Census Bureau report on November 29. This due in large part to buyers not being able to get financing now that lenders have tightened their lending standards in response to the subprime debacle.
• Major Wall Street banks write off billions of dollars in subprime-backed securities.
• Dire forecasts estimate that the credit crunch caused by the mortgage problems will cause between $250 billion to $500 billion of losses at banks and brokerages before it's done.

If you want to see how this kind of news looks on a price chart, consider the chart that we published in the latest Elliott Wave Financial Forecast. It shows how confidence in the mortgage market has simply fallen off a cliff. "The ABX Mortgage Indexes are akin to the eerie music that starts to play right before the goriest scenes in a horror movie," write our analysts Steve Hochberg and Pete Kendall. Even prime-rated mortgages (the top line on the chart) seem to have been tainted by the cliff-diving exploits of the subprime and Alt-A mortgage indexes. Full article>>> with eye-opening chart

 

Good news! 

The first three parts of Elliott Wave International's Market

Myths Exposed video series are online now, and each turns
conventional wisdom about the financial markets on its head, allowing you to think independently of the mainstream and call your own shots regarding portfolio management. There's already a buzz about this video series among independent-minded investors and traders. 

FREE! Sign Up to Begin the Video Series Now!

 

How To Recognize a Financial Mania When You're Smack Dab in the Middle of One By Susan C. Walker, Elliott Wave International  
 November 12, 2007

When you're caught in the middle of a bad storm, you don't really care whether it's a tropical depression or a full-strength hurricane. You just know you're hanging on for dear life. The same idea applies to financial markets. When a market is trending up strongly, it's hard to tell whether it's just a bull market or a more dangerous financial mania.
Full article>>>

 

Why the Fed is Such a Lousy Wizard
of Oz By Susan C. Walker, Elliott Wave International 
September 7, 2007

Central bankers who "follow the yellow brick road" end up in Jackson Hole, Wyoming, every Labor Day weekend for their annual symposium sponsored by – who else? – the Kansas City Fed. (Who can forget Judy Garland saying to her little dog, "Toto, I've got a feeling we're not in Kansas anymore," in the 1939 movie, The Wizard of Oz?) The Jackson Hole Resort serves as the Federal Reserve's equivalent of the Emerald City, as Fed governors and presidents meet with central bankers and economists from around the world to discuss economic issues. This year, the symposium focused on housing and monetary policy. Usually, the Fed chairman kicks off the symposium and, this year, the new chairman, Ben S. Bernanke, did the honors. He closed his speech with these words: Full article>>>

 

Wanted: Prime Suspect of Housing Market Murder

By Susan C. Walker, Elliott Wave International
October 8, 2007

Helen Mirren accepted her Emmy award for best actress in the mini-series,  with elegance and grace. Just the opposite of the tough detectiv
"Prime Suspect" superintendent character she plays who tracks down murder suspects in England. Who would Jane Tennison pick out as the prime suspect for the murder of the U.S. housing market and the resulting gruesome credit crunch? Full article>>>

 

The Federal Reserve's rate cut is dominating the news, as did recent Fed injections into the market. And the media continues to hold its collective breath each time Bernanke meets or prepares for an announcement.

But can the Fed save you from the credit crunch? Find out in this FREE 5-page report from Elliott Wave International. It includes a chart mapping the Fed's actions that you'll have to see to believe!"Can the Fed Save You From the Credit Crunch?" answers these critical questions:

• Can I rely on the Fed?
• How did this credit crisis really get started?
• Inflation, but what about deflation?
• What can I do to protect myself?

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"The interaction of housing, housing finance, and economic activity has for years been of central importance for understanding the behavior of the economy, and it will continue to be central to our thinking as we try to anticipate economic and financial developments."

Then came the other speeches. And it seems that some of the guests in Emerald City were waiting for their chance to pull back the curtain and prove that the Wonderful Wizard of Oz isn't such a wizard after all. Bloomberg reported that "Federal Reserve officials, wrestling with a housing recession that jeopardizes U.S. growth, got an earful from critics at a weekend retreat, arguing they should use regulation and interest rates to prevent asset-price bubbles." Apparently, one academic paper presented at Jackson Hole graded the Fed an 'F' for the way it has handled the repercussions from the rise and fall of the housing market.

Truth be told, these folks are a little late to the table as critics of the Fed. We're glad they're joining us, but here's what they still haven't learned: It isn't because the Federal Reserve messes up by allowing credit, asset and stock bubbles to form that it's not a wizard. The Federal Reserve isn't a wizard for one particular reason that it doesn't want anybody to know – and that is that the Fed doesn't lead the financial markets, it follows them.People everywhere want to believe in the