The Wave Principle And The New Science of Socionomics
The Science of History and Social Prediction best- selling author Robert Prechter’s revolutionary two-book set, Socionomics:
Stocks To Watch
Ford Motor Company [F]
© ELLIOTT today, July 25, 2008
and this is the chart from 1998
Genereal Electric (GE)
© ELLIOTT today, April 12, 2008
GE now... and then
Genereal Electric (GE)
© ELLIOTT today, October 24,2007
Pattern - Not the News....
Citigroup Inc.
© ELLIOTT today, April 12, 2008
and then...
Early Warning from ML
S&P 500 Index
© ELLIOTT today, April 12, 2008
Special Report
S&P 500 Index, daily
© ELLIOTT today, November 10 2007Panic Potential?
Today's message is clear: the close on Friday near the previous lows is very dangerous. On Friday, reporters on CNBC for the first time this year used the word "panic". I often showed a typical pattern before markets are slumping or crashing. But the most imoportant thing for you is to "believe what you see". Hamilton Bolton once said this, and, yes, it is very difficult, at least, after a 25 year hyper-advance of Cycle degree bull market.
"The market always goes up."
Stay out of the market. Can a "crash" happen again? Yes, but a crash is nothing but an Elliott correction, but this one, if it is really underway, is of the highest Elliott degree in the history of U.S.
Think about it. Have a great weekend, Enjoy your life.
DJIA - 5 Waves Up Complete !
© ELLIOTT today, July 14,2007
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.
Another important measure of sentiment that is showing a historically unprecedented level of optimism is the percentage of mutual fund cash levels relative to assets. A revised figure from the Investment Company Institute shows that mutual fund cash dropped to just 3.6% in March, an all-time record low. The reading breaks the low of 3.9%, which came six months before a major stock peak in 1973, and 4% , which accompanied the March 2000 top in the S&P and NASDAQ. A break of 13,259 in the DJIA will confirm that at least an Intermediate wave four correction is underway that will last longer as any correction we have seen since October 2005.
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New
Stocks To Watch
HEE ! Watch The Pattern
JPM, December 13,2007
Fibonacci - At It's Best
© ELLIOTT today, Nov 7,2007,Carl H. Lachmann
As the labeled chart reveals, JPM undertook a 24% slump from its high of $53.03 on May 10,2007 . The revovery so far reached exactly
the famous 61.8% Fibonacci retracement measured from the low of November 21,2007 ($40.15). Elliott channels and EW labeling is an
original overlay of the chart prestented on December 9,2007. Who says forecasting is not possible?[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
General Motors (GM)
© ELLIOTT today, Nov 7,2007,Carl H. Lachmannopen chart
GM SAID it will book a $39 billion third-quarter noncash charge from a write-down tied to tax credits it would have used in the event it was profitable. WSJ, Nov 7,2007
As the labeled chart reveals, GM undertook an 80% slump from its high of $93.43 on April 2000. The revovery so far reached a 33% retracement measured from the low of December 26, 2005.
open chart
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
IBM
© ELLIOTT today, Oct 24,2007,Carl H. Lachmannopen chart
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
GE [General Electric]
© ELLIOTT today, Oct 24,2007,Carl H. Lachmannopen chart
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
Citygroup - (C)C Falls Further
© ELLIOTT today, Nov 7,2007,Carl H. Lachmannopen chart
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
Citygroup - (C)
© ELLIOTT today, Oct 24,2007,Carl H. Lachmann
open chart
[Details only to subscribers !!!] (Maria Kostelletou-Lachmann)
The Ghosts of October 19
By Mark Skousen
Certain dates stand out in my life. One is October 19, 1987, the day the Dow
Jones Industrial Average suddenly collapsed by 22%. That day is also
significant because it happened to be my 40th birthday. Ever since then, I've
been known as the "crash baby."
Most of my broker friends and investors were in a somber mood that Monday
evening, stunned by the 509 point drop in the Dow. I was ebullient because by
some fortune I sent out a "flash alert" on September 8, 1987, six weeks
before the crash, telling my subscribers: "The coming credit squeeze could
devastate the stock and bond markets; get out now! I advise you to sell all
stocks and long-term growth mutual funds."
That evening, my wife had arranged a surprise birthday party. I had a lot of
fun, but the party ended early as friends rushed home to check the financial
news overseas.
Was the crash a portend of something more ominous, another Great Depression
perhaps? After all, a similar stock market crash occurred in October, 1929,
followed by the worst economic collapse in world history.
One of my technical trader friends was deeply worried. His trading system was
based on moving averages of stock indexes like the Dow. At the New Orleans
investment conference a month later, he showed a chart of the Dow with a
"triangle" formation. He pointed to the triangle. "If the Dow breaks below
the triangle formation," he warned, "the Dow could fall another 1,000 points
or worse!"
I thought it was all a joke, but he was dead serious. He staked his
reputation on his prediction. A few days later, the Dow started falling
again, ominously below the point of the triangle. Yet, miraculously, the Dow
never crashed. In fact, it rallied to new highs. My friend soon ended his
newsletter, shamed perhaps by his failure to predict the next Great
Depression.
As a macro-economist, I look at the economic fundamentals before making a
prediction. And, in the case of the October, 1987, crash, the economic
fundamentals looked to me to be largely sound. Business across the nation was
doing well, both before and after the crash. The economy was growing,
inflation was under control, and interest rates were relatively stable. So
while I anticipated short-term trouble, I thought the long-term outlook
looked good, and it wasn't long before I started recommending stocks again.
So why did the Dow Jones Industrial Average collapse by 22% on October 19,
1987?
Historians point to several factors, such as comments by the Treasury
Secretary about a weak dollar and trade deficit, but I believe the crash can
be blamed in large measure on an impulsive "Mr. Market" and the technical
traders who encouraged mindless trading based on a line on a chart rather
than business fundamentals. Too many investors were listening to my friend
with the charts.
In the summer of 1987, telephone-switching between no-load mutual funds was
all the rage, based solely on a technical charting system of a 39-week moving
average. Mutual fund investing was extremely popular, to the point where you
couldn't go through a meal at home in the evening without a broker calling
and telling you about the latest mutual fund. Few investors knew or cared
about the companies the fund managers were buying. Just follow the line on a
chart showing the mutual funds were moving higher. The brokerage business had
become so successful that a book was released that year written by a Merrill
Lynch broker entitled No Experience Necessary: Make $100,000 a Year as a
Stockbroker (Simon & Schuster, 1987). How? By buying and selling mutual
funds.
As a result, the market got way ahead of itself, with everyone following the
same charts. Then when the price of the mutual funds went below their 39-week
moving averaging, on the Friday before the Monday crash, everyone sold at
once. The October 1987 crash was purely a technician's folly, and with the
business fundamentals sound, the market quickly recovered within a few weeks.
As we celebrate the 20th anniversary of the 1987 crash, the media has
recently asked me repeatedly this question: What factors could cause the
stock market to collapse again? Or are we immune to another financial
disaster?
Here is my answer: There are several potential financial crises out there
that could cause the market to suddenly turn south. At the beginning of this
year, I attended the American Economic Association meetings in Chicago, where
I was fortunate to attend a luncheon with Fed chairman Ben Bernanke. He
wouldn't take questions about current Fed policy, including interest rates,
but he spoke volumes when he gave his formal talk to us at the luncheon.
Ostensibly, the topic was "Central Banking and Bank Supervision in the United
States," but reading between the lines, it was clear to see that Bernanke was
worried about a financial storm ahead.
In his speech, he used the terms "crisis," "risk," "panic," "threats,"
"stress," and similar words at least 36 times.
Bernanke said that the Fed has set up a "crisis center" to handle potential
global financial problems - to anticipate them, and to deal with them if they
occur. What are the possibilities?
* A dollar collapse, like the one Paul Volcker suggested would happen in the
next few years. (We're certainly moving in this direction.)
* A non-dollar currency crisis in Asia, Europe or Latin America (shades of
the 1997 Asian currency crisis).
* A housing crash and foreclosure crisis (we suffered one this summer).
* A major terrorist attack on a financial center, such as New York, London or
Tokyo.
* A sharp unexpected rise in inflation.
Bernanke revealed the various policy measures the Fed might take in response
to a crisis: buying government bonds, providing overdrafts and other short-
term credits to banks, facilitating currency swaps (to boost the dollar), and
"securities lending," that is, lending money to institutions to buy stocks.
In sum, the answer is always the same: inject liquidity into the system to
keep the stock market from collapsing. So far it's worked like a charm. Alan
Greenspan applied this bailout policy several times during his 19-year tenure
-- during the 1987 crash, and 1997 Asian currency crisis, the Y2K computer
threat, and the 2001 terrorist attacks. (His new book "The Age of Turbulence"
addresses all these events in detail.)
Bernanke had his first test this past summer with the mortgage credit crunch.
The world's markets were on the verge of collapse on August 18 when the Fed
intervened...by injecting liquidity.
But what if the same old medicine stops working, and the Fed injects
liquidity, but the dollar and the stock markets keep on falling? There's only
one protection: buy gold! And buy the products gold will buy. And that raises
the specter of hoarding and the collapse of the world monetary system. And
that leads to social unrest and...the institution of new emergency powers by
the Federal government.
[Joel's Note : Mark Skousen is a financial economist, university professor,
and author. He is editor of Forecasts & Strategies , writes his own free
weekly e-letter and produces Freedom Fest , the "King of Worldly Conferences,"
scheduled for July 9-12, 2008, in Las Vegas. Psychology of Brokerage Strategists
Professional brokerage-house equity-allocation strategists tend to recommend a heavy weighting in stocks just before the market falls and a lighter weighting just before the market advances.
This is normal behavior, which itself helps to set the market's highs and lows. (Conquer The Crash, 2003, Robert R. Prechter)
Protection
Trading Shots On Trade
CNBC.com, October 10,2007
U.S. Congressman Duncan Hunter addressed the trade imbalance issue and said he would pass a bill that would bring overseas manufacturing jobs back to the United States.
"What is missing from this economy is 1.4 million jobs that have moved to China," said Hunter.
Congressman Ron Paul of Texas said America must start living within its means if it wants a healthier trade position.
"Right now we owe foreigners $2.7 trillion," said Paul. "No wonder they have money to come back here and buy stuff up and then we object."
"We can't maintain a reserve currency where our greatest export today are paper dollars," he added.
The debate -- sponsored by CNBC, MSNBC and The Wall Street Journal -- was marked by hearty but generally cordial disagreement on such issues as recession, taxes and the health of the middle class. http://www.cnbc.com/id/21209466
