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02 December 2011

Your Working Helps Me .. My Working Helps You

"Your Work Helps Me in a Very Practical Way"
Prechter talks with Mind of Money Host Doug Lodmell
November 09, 2011

By Elliott Wave International

Robert Prechter offers a broad overview of the Wave Principle in this interview clip with The Mind of Money host, Douglass Lodmell. As Bob explains, "The work we do is so different from what other people do." Enjoy listening to Bob explain how the Wave Principle differs from fundamental analysis and how it can help you to
anticipate important turns and changes in the markets.






Learn the Why, What and How of Elliott Wave Analysis
Financial media use news and economic events to explain market moves. Steer clear of this misguided approach. Learn what really moves the markets with The Elliott Wave Crash Course.
In this series of three FREE videos, Senior Tutorial Instructor Wayne Gorman demolishes the widely held notion that news drives the markets. Each video will provide a basis for using Elliott wave analysis in your own trading and investing decisions.
This

25 November 2011

a Deflationary Depression ahead


America's First Deflationary Depression: Is a Bigger One Ahead?
Social psychology precipitates economic depressions 
November 07, 2011

By Elliott Wave International

Don't blame Martin Van Buren for America's first deflationary depression. Social mood rode higher in the saddle than did our 8th President, who only stood 5' 6".
Elected in 1836, by the time Van Buren assumed office in March 1837 a speculative bubble had burst and a banking crisis was at hand (sound familiar?) -- the national mood had turned south and the "Panic of 1837" followed. Van Buren was known as "The Little Magician," but he could not pull an economic recovery out of the hat. He met defeat seeking a second term.
America's first deflationary depression lasted until 1842. Van Buren blamed over-zealous business practices and a credit bubble (sound familiar 2x?). The panic precipitated bank failures; many speculators who bought land to capitalize on railroad expansion lost everything. The depression worsened as Van Buren continued Andrew Jackson's economic policies. Businesses failed and unemployment was widespread. There were even "food riots" in several cities.
(Author's note: Because of substantial revenue inflows into the Treasury during the boom of the early 1830s, the United States government became debt free in 1835. Ironically, this was the very year the depression began. Stock prices fell sharply despite the federal government paying off all of its debt. Conventional wisdom would have us believe reducing the national debt, or paying it off entirely, would lift stock prices. It didn't happen in 1835, so there must be something else at work. That "something else" is social mood.)
The 1837-1842 deflationary depression comprised Supercycle Wave II, the end of which saw the beginning of the biggest economic expansion in history -- Supercycle wave III! The 1929-1933 Great Depression still grabs more attention, but in fact the earlier Supercycle Wave II decline set the stage for the United States becoming the greatest economic and military power the world has ever known.
President Herbert Hoover held office during the 1929 Crash and onset of the Great Depression, a.k.a. Supercycle Wave IV. Yet no U.S. President has thus far been at the helm during a Grand Supercycle market decline. The last decline of that degree had its origin in the South Sea Bubble in 1720, when Great Britain's King George I was on the throne. The rampant speculation of the time spread beyond the financial class, such that porters and ladies' maids had enough money to buy their own carriages. Members of the clergy took part in the mania. Poof! Life savings were wiped out. England's Postmaster General committed suicide. Hundreds of members of Parliament lost money. As for the directors of the South Sea Company itself, they were forced to give up their property and arrested to boot.
Martin Van Buren led the nation during our country's first Supercycle depression -- as President he was powerless to stop it. Who will occupy the Oval Office when the next Grand Supercycle depression develops? This we believe: That individual will be powerless to prevent it. He or she will only be a President.
What is more powerful than a President of the United States? The answer is "social mood." How is this powerful force shaping the economy?
Discover the answer in the 90-page Free Report called the Deflation Survival Guide.

Now is the time to prepare for a deflationary depression. Start by reading the 90-page free eBook, Deflation Survival Guide, which includes Robert Prechter's most important analysis and forecasts regarding deflation. This guide will help you survive a major deflationary trend, and even equip you to prosper.
Download your free eBook, the Deflation Survival Guide, now >>

21 November 2011

These are the Best Technical Indicators for Trading

What Are the BEST Technical Indicators for Successful Trading?
8 technical analysis tools that give any trader an edge
November 14, 2011

By Elliott Wave International

You may have seen a TV ad where "traders" describe their strategies, and one says, "I trade on fundamentals." That sounds very reassuring -- except that, on any given day, "fundamentals" are a mixed bag:
  • You might have a good U.S. employment report...but bad news from Europe
  • A positive Fed statement...but a negative housing number
  • Strong earnings...but slowing consumer spending
And so on. Which "fundamental" factor trumps the other? Which one carries more weight in your forecast? Your guess is as good (or bad) as anybody's.
Your alternative is technical analysis, which forecasts the markets' short- and long-term moves based on objective metrics, not guesses.
Here at EWI, we've always strived to help our readers learn to think for themselves. So we've put together for you a free 8-lesson report, "Best Technical Indicators for Successful Trading" that teaches you how to use these technical tools:
  1. The Personality of Elliott Waves
  2. Head and Shoulders Pattern
  3. Fibonacci Retracements
  4. Advance-Decline Line
  5. Sentiment
  6. Volume
  7. Trendlines
  8. Momentum Analysis Using MACD
Here's a small preview of this free 8-lesson report.
Trendlines

A trendline represents the psychology of the market; specifically, the psychology between the bulls and the bears. If the trendline slopes upward, the bulls are in control. If the trendline slopes downward, the bears are in control.



Moreover, the actual angle or slope of a trendline can determine whether or not the market is extremely optimistic, as it was in the upwards sloping line in Figure 1-1 or extremely pessimistic, as it was in the downwards sloping line in the same figure.

Now we're on to the fun part -- drawing trendlines. You can do this several different ways...

Finish Reading This 8-Lesson Report Today, FREE
In this free report, you will learn some of the most effective tools of the trade from analysts at Elliott Wave International, the world's largest technical analysis firm.
Find out which technical indicators are best for analyzing chart patterns, which are best for anticipating price action, even which are best for spotting high-confidence trade setups -- plus how they all complement Elliott wave analysis.
Download your "Best Technical Indicators" report now >>

05 November 2011

the Myth of Corporate Earnings being a Market Driver


Earnings: Stock Market's Brightest False Beacon
"Earnings estimators are too pessimistic at bottoms and too optimistic at tops," explains EWI's president Robert Prechter 
November 03, 2011

By Elliott Wave International

Four times a year, investors and Wall Street watch the quarterly corporate earnings reports, trying to anticipate the trend in stocks. Another earnings season is upon us right now, so read this excerpt from our free Club EWI report, "Market Myths Exposed."
"Myth No. 1 -- 'The bottom line is earnings drive stock prices' -- Investopedia.com.

"It's simply not true. The flawed notion that profits drive stock prices is something that EWI has discussed numerous times over the years. For one thing, quarterly earnings reports announce a company's achievements from the previous quarter. The trends in earnings and stock prices sometimes even move in opposite directions, such as in the 1973-74 bear market when S&P earnings rose every quarter as the S&P declined 50%. More recently, earnings have been cycling with stocks, but that still leaves the problem of reporting delays, which leave investors eating the market's dust when the trend changes.



"To try to get around this, pundits use analysts' estimates of future earnings as a guide. In doing so, however, they are subject to the same herding impulses as investors. As [Robert Prechter's] Conquer the Crash puts it, 'Earnings estimators are too pessimistic at bottoms and too optimistic at tops, just when you most need the indicator to tell the truth.'"
The S&P earnings hit a new record in Q2 of this year. This chart from our September 2011 Elliott Wave Financial Forecast puts them next to the Dow. Observe when the previous high in earnings took place:


Market Myths Exposed, a FREE ebook from Elliott Wave International, uncovers 10 of the most common misconceptions about the markets that can affect your investment decisions. Learn the truth about inflation and deflation, the FDIC, diversification, speculation and more in this 33-page eBook.
Get valuable insights you won't find anywhere else. Download your free eBook >>

23 September 2011

Evaporation of Wealth

Evaporation of Wealth on a Vast Scale
How $1-million can disappear
September 19, 2011

By Elliott Wave International

The bursting of the "debt bubble" which started in 2008 is far from over.

It's the financial story of our age and it's happening before our eyes. The full scope is hard to keep up with because it's unfolding at various levels.

The top level is the sovereign debt crisis:
  • National governments: Several in Europe and even the U.S.
  • State and local governments: services slashed; vendors waiting to get paid.
  • Corporations: financial institutions at home and abroad remain in questionable health. PIMCO Chief tells Bloomberg (9/13) "We're getting close to a full-blown banking crisis in Europe." And CNBC reports (9/14) "Moody's Investors Service said...it downgraded the credit ratings of Societe Generale and Credit Agricole."
  • Individual Households: "under-water" mortgages; "new conservatism" toward spending.
As the credit bubble continues to deflate, the evaporation of vast wealth may follow on a historic scale. Please read this excerpt from the second edition of Conquer the Crash (pp. 94-95):
"...a lender starts with a million dollars and the borrower starts with zero. Upon extending the loan, the borrower possesses the million dollars, yet the lender feels that he still owns the million dollars that he lent out. If anyone asks the lender what he is worth, he says, 'a million dollars,' and shows the note to prove it. Because of this conviction, there is, in the minds of the debtor and the creditor combined, two million dollars worth of value where before there was only one. When the lender calls in the debt and the borrower pays it, he gets back his million dollars. If the borrower can’t pay it, the value of the note goes to zero. Either way, the extra value disappears...

"The dynamics of value expansion and contraction explain why a bear market can bankrupt millions of people. At the peak of a credit expansion or a bull market, assets have been valued upward, and all participants are wealthy -- both the people who sold the assets and the people who hold the assets. The latter group is far larger than the former, because the total supply of money has been relatively stable while the total value of financial assets has ballooned. When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else. In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or non-existent valuations. The 'million dollars' that a wealthy investor might have thought he had in his bond portfolio or at a stock’s peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just disappears. You see, he never really had a million dollars; all he had was IOUs or stock certificates. The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons. This is exactly what happens to most investment assets in a period of deflation."
Now is the time to prepare for a deflationary depression by reading the 90-page Free Report titled Deflation Survival Guide. This eBook is now updated with Robert Prechter's most important analysis and forecasts regarding deflation.
You can read this free financial guide right away as a Club EWI Member (membership is free). Joining Club EWI is easy and just takes moments. See the Deflation Survival Guide on your screen by following this link>>

27 July 2011

How to Find Potential Trade Setups


How to Find and "Hook" Potential Trade Setups
A Free Lesson on How to Combine Technical Indicators with Elliott Wave Analysis 
July 11, 2011

By Elliott Wave International

Trading using technical indicators -- such as the MACD, for example, Moving Average Convergence-Divergence -- can do one of two things: help you or hinder you.
Using them as a forecasting method alone can be about as predictable as flipping a coin. But when you combine them with other forms of technical analysis (i.e. the Wave Principle), the same MACD can be your new best friend.
Technical indicators are meant to do exactly what the name implies: "indicate" that a buy or sell signal may be in place. (Don't confuse "indicate" with "guarantee": They are not called "technical guarantors" for a reason.)
Elliott Wave International's Futures Junctures editor Jeffrey Kennedy shows you how he uses technical indicators to his advantage in his FREE eBook,The Commodity Trader's Classroom:
"Rather than using technical indicators as a means to gauge momentum or pick tops and bottoms, I use them to identify potential trade setups."
Jeffrey goes on to describe his favorite indicator, the MACD:
"Out of the hundreds of technical indicators I have worked with over the years, my favorite study is the MACD [which] uses two exponential moving averages (12-period and 26-period). The difference between these two moving averages is the MACD line. The trigger or Signal line is a 9-period exponential moving average of the MACD line."
Figure 10-1 gives you an example of the MACD indicator in Coffee futures.
Coffee - December Contract Daily Data
One of the signals of a potential trade setup that the MACD often introduces is what Jeffrey refers to as the Hook. Here's another quote from the free eBook:
"A Hook occurs when the MACD line penetrates, or attempts to penetrate, the Signal line and then reverses at the last moment. In addition to identifying potential trade setups, you can also use Hooks as confirmation. Rather than entering a position on a cross-over between the MACD line and Signal line, wait for a Hook to occur to provide confirmation that a trend change has indeed occurred. Doing so increases your confidence in the signal, because now you have two pieces of information in agreement."
Figure 10-4 gives you an example of the Hook at work in live cattle futures.
Live Cattle - December Contract Daily Data
"A Hook should really just be a big red flag, saying that the larger trend may be ready to resume. It’s not a trading system that I follow blindly. All I'm looking for is a heads-up that the larger trend is possibly resuming."
Learn more about other technical indicators that you can use to your advantage, as well as the other important lessons in the FREE 32-page eBookThe Commodity Trader's Classroom. It is filled with actionable lessons you can apply to your trading strategy. Download it right now, instantly, when you create your free Club EWI profile.

15 June 2011

DOW Jones Industrials Below 12,000 !!


Six Straight Weeks of Decline Take DJIA Below 12,000: What Now?
Before blaming falling stocks on the most recent weak economic reports, let's check some dates 
June 14, 2011

By Elliott Wave International

As of June 10, the Dow has suffered the "longest losing streak since the fall of 2002. The market's last seven-week stretch of losses began in May 2001, as the dot-com bubble deflated," reports The Associated Press.
As for why stocks are falling, most observers agree: Blame "weaker hiring, industrial output, and a moribund housing market." The economic reports from the past two weeks made that clear.
But wait a minute. The DJIA didn't top in the past two weeks -- it topped on April 29. At the time:
  • U.S. unemployment benefit applications had been trending down/flattening. In fact, "The unemployment rate fell last month in more than 80% of the nation's largest metro areas," said an April 27 AP report.
  • U.S. industrial output was up. In fact, "both the Philly and N.Y. Fed reports show[ed] improving manufacturing and business conditions." (Reuters, April 15)
  • As for the U.S. housing market, it officially entered the "double-dip recession" zone only on May 31, a month after the Dow's April 29 peak. 

This is not to say that unemployment, manufacturing and real estate were peachy in April. But the worst of the reports from those areas of the economy only came after the stock market had already entered the decline. The most recent weak economic reports hardly explain why stocks topped when they did.
If you're looking for a better explanation, consider an Elliott wave perspective: The economy doesn't lead the stock market -- it's the stock market that leads the economy.
Skeptical? Then think back to 2007. "Goldilocks economy," strong corporate earnings, unemployment at 4.4% -- nothing but blue skies ahead. The Dow rallies to an all-time high above 14,000 in October 2007 -- and over the next 18 months goes on its biggest losing streak in 70+ years, falling 54% and ushering in "the Great Recession."
Now fast forward to March 2009. The Dow has crashed below 6,500; unemployment has more than doubled; the desperate Fed has dropped interest rates to 0%; foreclosures; bailouts; consumer confidence at an all-time low; general state of near-panic. The Dow bottoms on March 6, 2009, and stages a powerful two-year rally above 12,000.
By conventional logic, you'd have to agree that, paradoxically, "the good economy" of 2007 prompted the deflationary crash, while "the bad economy" of 2009 sent stocks flying.
But here's an explanation that actually makes sense: Broad market trends are not created by the economic conditions -- social mood is what creates them. Social mood doesn't depend on what Ben Bernanke had for breakfast -- it changes for endogenous reasons, and those changes follow the Elliott wave model. Stocks lead the economy because they are quicker to register changes in social mood.
Before you make investment decisions based on the latest economic report, be sure to read the 2011 edition of The Independent Investor eBookby Elliott Wave International. You will see example after example of the fallacy to the belief that economic conditions direct the moves in the stock market.  Download your free 50-page Independent Investor eBook now.

28 May 2011

Fractals and the Stock Market


What Does a Fractal Look Like?
And What Does It Have to Do with the Stock Market? 
May 26, 2011

By Elliott Wave International

If the word 'fractal' comes up at all in conversation, that conversation is probably being held in a mathematics department. However, anyone who is interested in the Wave Principle and how it applies to the stock market may have stumbled across the phrase "robust fractal." If you want to know more about what it means in that context, here's an excerpt from Elliott Wave International's primer on fractals that explains the connection.
* * * * *
Excerpted from The Human Social Experience Forms a Fractal
by Robert R. Prechter
In the 1930s, Ralph Nelson Elliott discovered that aggregate stock market prices trend and reverse in recognizable patterns. In a series of books and articles published from 1938 to 1946, he described the stock market as a fractal. A fractal is an object that is similarly shaped at different scales.
Although Elliott came to his conclusions fifty years before the new science of fractals blossomed, he took a step that current observers of natural processes have yet to take. He explained not only that the progress of the market was fractal in nature but discovered and described the component patterns. The patterns that Elliott discerned are repetitive in form but not necessarily in time or amplitude. Elliott isolated and defined a number of patterns, or "waves," that recur in market price data. He named and illustrated the patterns. He then described how they link together to form larger versions of themselves, how they in turn link to form the same patterns at the next larger size, and so on, producing a structured progression. He called this phenomenon The Wave Principle….
The Stock Market as a Robust Fractal
A classic example of a self-identical fractal is nested squares. One square is surrounded by eight squares of the same size, which forms a larger square, which is surrounded by eight squares of that larger size, and so on.
A classic example of an indefinite fractal is the line that delineates a seacoast. When viewed from space, a seacoast has a certain irregularity of contour. If we were to drop to ten miles above the earth, we would see only a portion of the seacoast, but the irregularity of contour of that portion would resemble that of the whole. From a hundred feet up in a balloon, the same thing would be true.
Photo of Madeira coastline, near Sao Jorge, by Plane Person (source: Wikimedia Commons)
Scientists today recognize financial markets' price records as fractals, but they presume them to be of the indefinite variety. Elliott undertook a meticulous investigation of financial market behavior and found something different. He described the record of stock market prices as aspecifically patterned fractal yet with variations in its quantitative expression. I call this type of fractal, which has properties of both self-identical and indefinite fractals, a robust fractal. Robust fractals permeate life forms. Trees, for example, are branching robust fractals, as are animals, circulatory systems, bronchial systems and nervous systems. The stock market record belongs in the category of life forms since it is a product of human social interaction.
How Is the Stock Market Patterned?
Idealized Wave Development and Subdivisions
Figure 1 shows Elliott's idea of how the stock market is patterned. If you study this depiction, you will see that each component, or "wave," within the overall structure subdivides in a specific way by one simple rule: If the wave is heading in the same direction as the wave of one larger degree, then it subdivides into five waves. If the wave is heading in the opposite direction as the wave of one larger degree, then it subdivides into three waves (or a variation). These are called motive and corrective waves, respectively. Each of these waves adheres to specific traits and tendencies of construction, as described in Elliott Wave Principle (1978).
Waves subdivide this way down to the smallest observable scale, and the entire process continues to develop larger and larger waves as time progresses. Each wave's degree may be identified numerically by relative size on a sort of social Richter scale.
Want to Know More About Fractals and the Stock Market? Then read the whole special report, called "The Human Social Experience Forms a Fractal." It's free of charge, so long as you are a member of Club EWI, which gives you access to many free reports that explain Elliott wave analysis and the Wave Principle.

17 April 2011

Use Bar Patterns to Spot Trade Setups in any Stock or Futures Market


Learn How to Use Bar Patterns to Spot Trade Setups
Bar chart patterns often introduces sizable moves in price 
April 14, 2011

By Elliott Wave International

To many novice investors, chart patterns might as well be tea leaves. Can they really tell you anything reliable? And even if they can, how in the world do you know what to look for?
Experienced traders know that the answer to the first question is a resounding "yes." As for the second one, we at EWI are all about recognizing chart patterns. To help you get started on this path, we've put together a free Club EWI resource called How to Use Bar Patterns to Spot Trade Setups.
It's a collection of lessons in trading and pattern recognition by one of EWI's top trading seminar instructors, Jeffrey Kennedy (who is also the firm's senior commodities analyst).
Enjoy this quick excerpt -- and for details on how to read this report in full, free, look below.
Chapter 1: How To Use Bar Patterns To Spot Trade Setups
Double Inside Bars

While many of my co-workers jog, bicycle or play in bands for a hobby, I amuse myself by looking through old price charts of stocks and commodities. Let’s look at a bar pattern that I call a “double inside day.”
Many of you who subscribe to my Daily Futures Junctures have seen me mention this bar pattern. I think everyone should be familiar with it. Why? Because it often introduces sizable moves in price -- always a good reason for a trader to pay attention.
So let’s begin with a basic definition: A double inside day, or bar, occurs when two inside bars appear in a row. An inside bar is simply a price bar with a high below the previous high and a low above the previous low.

Notice that the range of price bar number two encompasses price bar number one, and price bar number three encompasses price bar number two.

Figures 11-2 (Wheat) shows an example of double inside days and the price moves that followed. (Continued.)
Read the rest of this 15-page report online now, free! All you need is to create a free Club EWI profile. Here's what else you'll learn:
  • How To Use Bar Patterns To Spot Trade Setups
  • How To Make Bar Patterns Work For You
  • How To Use An Outside-Inside Reversal to Spot Trade Setups
Keep reading this free report now -- all you need to do is create a free Club EWI profile.

14 March 2011

Popular Music and the Stock Market


How Punk Rock and Pop Music Relate to Social Mood and the Markets

March 10, 2011

By Elliott Wave International

We can now add the recent uprisings in North Africa and the Middle East to the category of life imitating art -- specifically, music lyrics. Those who lived through the 1980s might be forgiven for hearing an unbidden snatch of music run through their heads as they watched first Hosni Mubarak and now Moammar Gadhafi try to hold onto power -- "Should I Stay or Should I Go" by The Clash. In Libya, where Gadhafi has used air strikes and ground forces against the rebels, The Clash's other huge hit from 1981, "Rock the Casbah," describes the current situation so well it's almost eerie:
The king called up his jet fighters
He said you better earn your pay
Drop your bombs between the minarets
Down the Casbah way
Punk rock played by bands like The Clash, X, The Ramones, and the Sex Pistols had that in-your-face, defy-authority attitude that crashed onto the scene in Great Britain and the United States in the '70s and '80s. It's interesting that the lyrics can still ring true 30 years later, but even more trenchant is how the prevailing mood is reflected by the music of the times, as seen in this chart that Robert Prechter included in a talk he gave last year.

Popular culture reflects social mood, and the stock market reflects that same social mood. That's why we get loud, angry music when people are unhappy with their situation; they want to sell stocks. We get light, poppy, bubblegum music when they feel happy and content; they want to buy stocks. In a USA Today article about music and social moods in November 2009, reporter Matt Frantz made clear the connection that Elliott Wave International has been writing about for years:
The idea linking culture to stock prices is surprisingly simple: The population essentially goes through mass mood swings that determine not only the types of music we listen to and movies we watch, but also if we want to buy or sell stocks. These emotional booms and busts are followed by corresponding swings on Wall Street.
"The same social elements driving the stock market are driving the gyrations on the dance floor," says Matt Lampert, research fellow at the Socionomics Institute, a think tank associated with well-known market researcher Robert Prechter, who first advanced the idea in the 1980s. [USA Today, 11/17/09]
In the talk he gave to a gathering of futurists in Boston, Prechter explained how the music people listen to relates to social mood and the stock market:
When the trend is up, they tend to listen to happier stuff (see chart). Back in the 1950s and ‘60s, you had doo-wop music, rockabilly, dance music, surf music, British invasion — mostly upbeat, happy material. As the value of stocks fell from the 1960s into the early 1980s, you had psychedelic music, hard rock, heavy metal, very slow ballads in the mid-1970s, and finally punk rock in the late ’70s. There was more negative-themed music. [excerpt from Robert Prechter’s speech to the World Future Society's annual conference, 7/10/10]
Which brings us right back to punk rock. Although there's lots of upbeat music in the air now, we can assume that after this current bear market rally, we will hear angrier music on the airwaves as the market turns down. It might be a good time, then, to pay attention to what the markets were doing the last time punk rock blasted the airwaves. Here's an excerpt from "Popular Culture and the Stock Market," which is the first chapter of Prechter's Pioneering Studies in Socionomics.
The most extreme musical development of the mid-1970s was the emergence of punk rock. The lyrics of these bands' compositions, as pointed out by Tom Landess, associate editor of The Southern Partisan, resemble T.S. Eliot's classic poem "The Waste Land," which was written during the 'teens, when the last Cycle wave IV correction was in force (a time when the worldwide negative mood allowed the communists to take power in Russia). The attendant music was as anti-.musical. (i.e., non-melodic, relying on one or two chords and two or three melody notes, screaming vocals, no vocal harmony, dissonance and noise), as were Bartok's compositions from the 1930s.
It wasn't just that the performers of punk rock would suffer a heart attack if called upon to change chords or sing more than two notes on the musical scale, it was that they made it a point to be non-musical minimalists and to create ugliness, as artists. The early punk rockers from England and Canada conveyed an even more threatening image than did the heavy metal bands because they abandoned all the trappings of theatre and presented their message as reality, preaching violence and anarchy while brandishing swastikas.
Their names (Johnny Rotten, Sid Vicious, Nazi Dog, The Damned, The Viletones, etc.) and their song titles and lyrics ("Anarchy in the U.K.," "Auschwitz Jerk," "The Blitzkrieg Bop," "You say you've solved all our problems? You're the problem! You're the problem!" and "There's no future! no future! no future!") were reactionary lashings out at the stultifying welfare statism of England and their doom to life on the dole, similar to the Nazis backlash answer to a situation of unrest in 1920s and 1930s Germany.
Actually, of course, it didn't matter what conditions were attacked. The most negative mood since the 1930s (as implied by stock market action) required release, period. These bands took bad-natured sentiment to the same extreme that the pop groups of the mid-1960s had taken good-natured sentiment. The public at that time felt joy, benevolence, fearlessness and love, and they demanded it on the airwaves. The public in the late 1970s felt misery, anger, fear and hate, and they got exactly what they wanted to hear. (Luckily, the hate that punk rockers. reflected was not institutionalized, but then, this was only a Cycle wave low, not a Supercycle wave low as in 1932.)
In summary, an "I feel good and I love you" sentiment in music paralleled a bull market in stocks, while an amorphous, euphoric "Oh, wow, I feel great and I love everybody" sentiment (such as in the late '60s) was a major sell signal for mood and therefore for stocks. Conversely, an "I'm depressed and I hate you" sentiment in music reflected a bear market, while an amorphous tortured "Aargh! I'm in agony and I hate everybody" sentiment (such as in the late '70s) was a major buy signal.
Popular Culture and the Stock Market. Read more about musical relationships to social mood and the markets in this 40-page-plus free report from Elliott Wave International, called Popular Culture and the Stock Market. All you have to do to read it is sign up to become a member of Club EWI, no strings attached. Find out more about this free report here.

16 January 2011

Is Your Bank Safe ??

Is Your Bank on the "100 Safest" List? Maybe You Should Find Out
Close to Collapse: Bailed-Out Banks Facing Bankruptcy 
January 4, 2011

By Elliott Wave International

We want to trust in the financial stability of our bank. After all, most of us have money in these institutions.
In spite of our wishful thinking, the tide of bank failures has not stopped. And these failures are occurring well after the heart of the financial crisis -- and even after some of these banks received bailouts.
"Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.
The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators.
The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program."
Wall Street Journal (12/26)
Seven of the 98 small banks mentioned have already failed.
In the U.S. so far this year, 157 banks have failed -- that's the highest number since 1992.
More failures are likely because many banks are burdened by questionable "assets" and bad real estate loans.
"...your money is only as safe as the bank's loans. In boom times, banks become imprudent and lend to almost anyone. In busts, they can't get much of that money back due to widespread defaults.
If the bank's portfolio collapses in value, say, like those of the Savings & Loan institutions in the U.S. in the late 1980s and early 1990s, the bank is broke, and its depositors' savings are gone."
Conquer the Crash, 2nd edition, pp. 175-176
Yes, the Federal Deposit Insurance Corporation (FDIC) insures depositors, but the question is: Does the FDIC have the wherewithal to "make whole" alldepositors if scores of banks go under at the same time? Here at Elliott Wave International, we do not recommend that you count on the FDIC. Here's why:
"...did you know that most of the FDIC's money comes from other banks? This funding scheme makes prudent banks pay to save the imprudent ones, imparting weak banks' frailty to the strong ones. 
When the FDIC rescues weak banks by charging healthier ones high 'premiums,' overall bank deposits are depleted, causing the net loan-to-deposit ratio to rise. 
The result, in turn, means that in times of bank stress, it will take a progressively smaller percentage of depositors to cause unmanageable bank runs."
Conquer the Crash, 2nd edition, p. 177
Are some banks safer than others? We think so.
"Hope is not a strategy." If you plan to have money on deposit at a bank, we suggest reading our FREE report, "Discover the Top 100 Safest U.S. Banks." This 10-page bank safety report is available to you after you become a Club EWI member. Inside the revealing free report, you'll discover:
  • The 100 Safest U.S. Banks (2 for each state)
  • Where your money goes after you make a deposit
  • How your fractional-reserve bank works
  • What risks you might be taking by relying on the FDIC's guarantee
Please protect your money. Download the free 10-page "Safe Banks" report now.
Learn more about the "Safe Banks" report, and download it for free here.