The Surge Higher in U.S. Markets: "The Stage is Being Set"
The market's main trend stays the same.
August 03, 2012
By Elliott Wave InternationalElliott Wave International has long observed that external events do not alter the dominant trend of financial markets -- not even major events like wars, natural disasters, terrorist attacks, political assassinations or any other news that makes headlines.
Now, it is true that news can sometimes have a near-term effect on market prices.
The July 26 opening bell is an example.
Dow Surges 200 Points on Draghi Comments, Jobless ClaimsThat's from The Wall Street Journal. The text reads:
Europe's top central banker sparked a global rally in stocks after reassuring investors the Continent's central bank would be vigilant about holding together the euro zone.... European Central Bank President Mario Draghi...said the ECB is ready to do whatever it takes to preserve the common-currency union.The article adds that "the number of U.S. workers filing for unemployment benefits fell for the fourth time in five weeks, to a level that was far lower than expected."
EWI expected a near-term bounce in stock prices -- just one day ago.
On July 25, EWI's Financial Forecast Short Term Update said this to subscribers:
Near term, there may be a few more days of bounce. The stock market is setting the stage...The Update went on to describe what the stock market is setting the stage for. It is not what most investors expect.
The pattern in the major U.S. stock indexes has been 80 years in the making -- which is to say, the pattern is unfolding at a large degree of trend.
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