Market Outlook- 27 th July 2010
If "fundamentals" drive trend changes in financial markets, then shouldn't the same factors have consistent effects on prices?
For example: Positive economic data should ignite a rally, while negative news should initiate decline. In the real world, though, this is hardly the case.
On a regular basis, markets go up on bad news, down on good news, and both directions on the same news -- almost as if to say, "Talk to the hand cuz the chart ain't listening."
Unable to deny this fly in the fundamental ointment, the mainstream experts often attempt to reconcile the inconsistencies with phrases like "shrugged off," "defied" or "in spite of."
That begs the next question: How do you know when a market is going to cooperate with fundamental logic and when it won't? ANSWER: You don't.
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Take, for instance, the first three news items below regarding the July 22 performance in crude oil, versus the fourth headline, which occurred on July 23:
vs.
Unlike fundamental analysis, technical analysis methods don't rely on the news to explain or predict market moves. They look at the markets' internals instead.
This article, Free Insight Into Crude Oil's Next Big Move,was syndicated by Elliott Wave International. EWI is the world's largest market forecasting firm. Its staff of full-time analysts lead by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
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Market needs to sustain now
By Hitendra Vasudeo
Last week, the Sensex opened at 17914.12 attained a low at 17848.07 and moved up to weekly high of 18237.56. The Sensex finally closed the week at 18130.98 and thereby showed a net rise of 175 points on a week-to-week basis.
Index
In past weeks
White Candle
Black Candles
Net
Bull/Bear Control
Sensex
10
6
4
2
Bull Control
50
31
19
12
BSE Small Cap
8
33
17
16
BSE Mid Cap
9
1
36
14
22
The Bull/Bear Control table shows that all the indices are ruled still by the bulls inspite of the fear that bears could take the control at the earliest.
MACD shows an uptrend on daily and weekly charts. Now, we have to see how much strength the market gathers. Since the candle formation on weekly basis is not encouraging, we seek a further confirmation.
The 52-week ROC has moved down. Over the next 4 weeks, we do not have any big corresponding gains 52-week. Therefore, steady gains in the next 4 weeks can turn the 52-week ROC up.
The 14-week RSI and 52-week RSI both show upmoves. Therefore, the momentum for the Sensex to trade above 17800 may continue.
A structural change in Wave X will be seen. As a result of the rise above 18047, the internal structure of Wave X has altered but the same remains in existence. The day the end of Wave X confirmation is witnessed, Wave Y will begin for the final fall.
The Sensex wave flow since the low of December 1979 (We can connect with the RBI Securities Index, club with the Sensex and co-ordinate with the long-term Dow chart as the world cycle of market remains the same except for the Nikkei). In that case, we are trying to evaluate the full Sensex chart and let us see once again, where we stand. A couple of years back, we had done the Sensex Wave Flow by clubbing RBI Securities Index and Sensex).
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Dear reader,
In less than three months, and not even counting the past few days, the Dow has had six big swings averaging more than 1,000 points each -- one of them occurred in a single day.
Altogether, like a cross-country caravan, the Dow traversed more than 7,000 points within a 1,600-point range. And you thought the ocean was choppy!
In trademark fashion, the media blamed the bad days on everything from the Gulf oil spill to Greek debt to a "fat-finger" trader glitch to a double-dip recession to lackluster earnings. And they credited the good days to the same list of items "not looking as bad"!
On the other hand, a small group of investors were prepared for this very environment. They positioned themselves for safety and insulated themselves from risk.
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Warmest Regards,
Hitendra Vasudeostockmechanics.com
About the Publisher, Elliott Wave InternationalFounded 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 around the world.
Almost everybody who follows financial markets has heard about climbing the "wall of worry": the time when prices head up bullishly, but no one quite believes in the rally, so there's more worry about a fall than a rise.
What's the opposite condition in the market?
Bob Prechter named it the "slope of hope," meaning that as prices head down, no one wants to believe the market really has turned bearish, so there's more hope for a rise than fear of a fall.
Want to Know How to Prosper in a Deflationary Depression?If you haven't yet given Robert Prechter's deflation argument your full attention, you should know now that yesterday was the best time to do so. Download Prechter's 60-Page Guide to Understanding Deflation here.
The market has been rising recently, following a bearish decline from late April through the end of June, which makes now the perfect time to learn more about the slope of hope
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Suggested Subject:
It's FreeWeek at EWI: Get charts, analysis and forecasts for Crude, Nat Gas, Energy ETFs
Email Copy:
Greetings,
Our friends at Elliott Wave International have just announced the beginning of their wildly popular FreeWeek event, where they throw open the doors for you to test-drive some of their most popular premium services -- at ZERO cost to you.
You can access EWI's intraday, daily, weekly and monthly forecasts from EWI's Energy Specialty Service right now through noon Eastern time Wednesday, July 28. This service is valued at $347/month, but you can get it FREE for one week only!
The timing couldn't be better because Crude Oil and Natural Gas are both approaching important junctures. Opportunity is calling. This unique event only lasts a short time, so don't delay!
Learn more and get instant access to EWI's FreeWeek of Energy analysis and forecasts now -- before the opportunity ends for good.
P.S. FreeWeek is one of EWI's most popular programs, and it's perfect for anyone curious about EWI's subscription services. Please don't hesitate to tell your friends about the exciting opportunity FreeWeek provides. (Use this link to tell your friends.)
P.S. FreeWeek is one of EWI's most popular programs, and it's perfect for anyone curious about EWI's subscription services. Please don't hesitate to tell your friends about the exciting opportunity FreeWeek provides.
Mainstream financial analysts always look for ways to explain market action through news stories and events. Conventional wisdom states that news and inter-market correlations cause market booms and busts, but such explanations rely on selective presentation of the data. In this video, Elliott Wave International's Asian-Pacific Financial Forecast Editor Mark Galasiewski shows you how Elliott wave analysis was able to predict Hong Kong's late '90s mania and its aftermath in real time -- without looking at the news or the market's "fundamentals."
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The biggest balloon in the world is deflating.
This balloon had been inflated with a quadrillion (1015) dollars, which is to say: This balloon was filled not with air but with debt from around the globe.
What will happen as this global debt winds down? In two words: Deflationary Depression -- the likes of which could be unprecedented in history.
Read More