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4 Commodities Ripe for Opportunity -- NOW

If You Aren’t Making Music with Commodities, Try This Song Instead
Cocoa's 2016-7 bear market reversal was in total harmony with one kind of analysis

By Elliott Wave International

If financial markets were styles of music, equities, especially the most stable Big Board stocks, are like great classical compositions: They're made up of consistent, steady tempos you could listen to all day with the occasional booming or crashing note.
Commodities are different. They're the jazz players delivering choppy, frenetic tunes with jolting chord changes.
It's easy to write it off as chaos; to believe these markets open every morning as a blank slate, riffing off each other or external "vibes" in the moment. That's the very basis of fundamental market analysis and its reactive claim that outside news events drive price action.
But that's not the only option. Maybe you've heard of technical market analysis? It's based on a closed system of values, such as momentum, relative strength, bar patterns, Japanese candlesticks, and so on -- that provide an objective way to measure near-, and long-term future price trajectories.
A popular choice for market "techies" is Elliott wave analysis. It's incredibly user-friendly, thanks to the fact that there are only five core Elliott wave patterns to remember. One of them is called an impulse wave, defined as a five-wave move in the direction of the larger trend in which:

• Wave 2 never retraces 100% of wave 1
• Wave 4 does not enter the price territory of wave 1
• Wave 3 is never the shortest among waves 1, 3, and 5

Wave 3 is never the shortest because it's usually the most powerful wave in the sequence. Ralph Nelson Elliott himself described third waves as "wonders to behold." Think of the part in a song that builds and builds and then bursts into crescendo (price surge) or quiets into decrescendo (price selloff). That's a third wave.

Cryptos: 5 Simple Strategies to Catch the Next Opportunity

The key to success in cryptos is to approach this wild market in a way that insulates you from the hype, frenzy and rumors -- and helps you act when others flounder.
How? By using a proven market-forecasting methodology that can analyze price trends in Bitcoin, Ethereum and Litecoin objectively and clearly.
Our friends at Elliott Wave International have a practical resource to help your cryptos trading entitled 5 Simple Strategies to Catch the Next Opportunity.
This free crypto trading guide will help you learn:

• The pattern that allows you to anticipate big reversals
• What sentiment does at extremes and how to recognize it
• How to spot the rare feature that precedes a market turn

…and more.
Get instant access now -- for free -- at elliottwave.com.

Crypto Trading Guide

Bitcoin et al stole the November spotlight with their dramatic sell-offs. We thought it would be a great time to bring back our popular resource for your crypto readers. It's entitled Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity.

5 “Tells” that a Market May Be About to Reverse

Watch This Indicator if You Want to Get Tipped Off to Approaching Volatility

By Elliott Wave International

---

You're hearing a lot of explanations as to what's going on with the stock market. Here's an explanation you won't find in the mainstream – and it's one of the most useful of all.

---

The stock market's volatility from late July through early October was extraordinarily low. For 50 straight days the S&P 500 had not closed more than 0.8% in either direction, the longest such streak since 1968.
Yet, on October 3, all that changed. The markets dropped hard… and the VIX suddenly spiked even harder.
The sudden explosion in volatility blindsided almost everyone – investors, media talking heads, economists and market watchers alike. Volatility is a great disruptor, but not in a Silicon Valley sense. Instead, think: bull in a China shop.
Could anything have foreseen this sudden reversal?
Most investors, and even pros, don't realize it: YES!
Several indicators reliably predict volatility. You just have to know about them. (For a good overview of the best ones, check out 5 Tells a Market May Be About to Reverse.)
Here's one: Watch the "bets" made by so-called Large Speculators, hedge funds and the like. As explained below, this is a contrary indicator. Here's what one market analyst, Steven Hochberg, told his subscribers about the indicator on October 8th, just before volatility spiked and stocks plunged:

Large Speculators are making their largest bet in nearly a year that market volatility will remain subdued. Last week, this cohort of speculators increased their net-short position in VIX futures to 140,444 contracts, the largest bet on a low VIX since November 2017. … Large Specs often make their biggest bets near trend reversals, catching them in wrong-way bets at the wrong time.

Large Specs and other "big boys" tend to make "wrong-way bets at the wrong time." That propensity was again on display just two days after the forecast you see above -- on Oct. 10, when the DJIA closed more than 800 points lower. That was the index's worst day in eight months, and the worst whipping for technology shares in seven years. Moreover, the volatility continued the very next day, with the DJIA closing down another 545 points.
Of course, volatility implies moves in both directions. By Oct. 16, the DJIA closed up more than 500 points, only to surrender more than 300 points on Oct. 18. Then came other triple-digit declines on Oct. 22-23.
The bottom line is that watching large speculators (and other sentiment metrics) can prepare you to take advantage of volatility rather than being blindsided by it.
If you are an investor who wants to be ready for volatility, download the 5 Tells a Market May Be About to Reverse report here, instantly. It's 100% free!

FANG vs. BANG Stocks: Which is the Better Bet?

A recent MarketWatch article encouraged traders to "Forget Facebook and Apple and buy cheap BANG stocks." You may be wondering if that's really a good strategy.
Our friends at Elliott Wave International asked their Senior Metals Analyst, Tom Denham, for his take.
Tom was happy to provide an outlook for BANG stocks (Barrick Gold, Agnico Eagle, Newmont Mining and Goldcorp) vs. technology FANG stocks (Facebook, Apple, Netflix and Google) in a new, free video.
Get free answers now.

Will the Fed’s Rate Hikes Choke the Stock Market Rally?

Fact: The direction of interest rates does not determine the stock market's trend

By Elliott Wave International

Investing is hard. You, like many others, probably watch financial TV networks, read analysis, listen to talk shows and talk to fellow investors, trying to understand what's next.
One popular stock market "indicator" is interest rates. Analysts parse every word from the Fed, hoping they hear a clue about interest rates. They assume that falling rates means higher stock prices, while rising rates means lower stocks.
But does the conventional wisdom about interest rates and stocks square with reality? Let's do a brief historical review.
From October 1974 to December 1976, the stock market rose as the Fed funds rates trended lower. This occurred again from July 1984 to August 1987. Conversely, stock prices faltered as interest rates climbed from January 1973 to October 1974 and again from December 1976 to February 1978. So far, so good: rates up/stocks down, or vice versa.
But stock prices have also fallen as interest rates declined -- more than once. Take a look at the chart below. The commentary is from the February 2010 Elliott Wave Theorist:

[The chart] shows a history of the four biggest stock market declines of the past hundred years. They display routs of 54% to 89%. In all these cases, interest rates fell, and in two of those cases they went all the way to zero!

The next chart shows you when stocks and interest rates trended higher together. You can see the Dow rise from March 2003 to October 2007 as rates climb from around 1% to over 5%.

Here's the point: There is no consistent relationship between interest rates and the stock market.
That doesn't mean volatility will be absent around the time of a Fed meeting. But, if that ever turns out to be the case, keep this in mind from a classic Elliott Wave Theorist:

The Fed's decision will not cause any such volatility; it just may (or may not) coincide with it. Whether volatility continues around the Fed's meeting is up to the markets, not the Fed... [The] Fed's meeting, therefore, is not crucial, pivotal, historic or momentous. It is mostly irrelevant.

Investing is hard, but believing in the myth that interest rates have a big influence on the stock market makes it even harder. And, we have several more popular myths to dispel for you in our free report, Market Myths Exposed.
Did you know that the vast majority of portfolios are built on false assumptions? These false assumptions -- or Market Myths -- have been passed down across generations. They are so baked into investor psyche that no one ever thinks to challenge them... but we do. Do earnings really drive stock prices? Can the FDIC actually protect you? Is portfolio diversification a smart move? Download Market Myths Exposed now and find out whether your portfolio is built on flawed foundations. We guarantee you'll be shocked to find the truth.
Sign up now and get FREE access to The Market Myths Exposed eBook.

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11 Top FX Markets + Bitcoin, Ethereum & Litecoin

Forex FreeWeek | October 3-10, 2018

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Will the Fed’s Rate Hikes Choke the Stock Market Rally?

Fact: The direction of interest rates does not determine the stock market's trend

By Elliott Wave International

Investing is hard. You, like many others, probably watch financial TV networks, read analysis, listen to talk shows and talk to fellow investors, trying to understand what's next.
One popular stock market "indicator" is interest rates. Analysts parse every word from the Fed, hoping they hear a clue about interest rates. They assume that falling rates means higher stock prices, while rising rates means lower stocks.
But does the conventional wisdom about interest rates and stocks square with reality? Let's do a brief historical review.
From October 1974 to December 1976, the stock market rose as the Fed funds rates trended lower. This occurred again from July 1984 to August 1987. Conversely, stock prices faltered as interest rates climbed from January 1973 to October 1974 and again from December 1976 to February 1978. So far, so good: rates up/stocks down, or vice versa.
But stock prices have also fallen as interest rates declined -- more than once. Take a look at the chart below. The commentary is from the February 2010 Elliott Wave Theorist:

[The chart] shows a history of the four biggest stock market declines of the past hundred years. They display routs of 54% to 89%. In all these cases, interest rates fell, and in two of those cases they went all the way to zero!

The next chart shows you when stocks and interest rates trended higher together. You can see the Dow rise from March 2003 to October 2007 as rates climb from around 1% to over 5%.

Here's the point: There is no consistent relationship between interest rates and the stock market.
That doesn't mean volatility will be absent around the time of a Fed meeting. But, if that ever turns out to be the case, keep this in mind from a classic Elliott Wave Theorist:

The Fed's decision will not cause any such volatility; it just may (or may not) coincide with it. Whether volatility continues around the Fed's meeting is up to the markets, not the Fed... [The] Fed's meeting, therefore, is not crucial, pivotal, historic or momentous. It is mostly irrelevant.

Investing is hard, but believing in the myth that interest rates have a big influence on the stock market makes it even harder. And, we have several more popular myths to dispel for you in our free report, Market Myths Exposed.
Did you know that the vast majority of portfolios are built on false assumptions? These false assumptions -- or Market Myths -- have been passed down across generations. They are so baked into investor psyche that no one ever thinks to challenge them... but we do. Do earnings really drive stock prices? Can the FDIC actually protect you? Is portfolio diversification a smart move? Download Market Myths Exposed now and find out whether your portfolio is built on flawed foundations. We guarantee you'll be shocked to find the truth.
Sign up now and get FREE access to The Market Myths Exposed eBook.

Here’s Why "Strong Jobs" Don't Mean "Higher Stocks"

he stock market leads the economy, not the other way around

By Elliott Wave International

It's a wonderful thing when jobs are added to the U.S. economy.
But, as far as investing goes, history shows that you should not bet your stock market portfolio on it. Conversely, even a series of weak jobs reports doesn't mean you should bet against stocks.
This is worth mentioning because many pundits believe big economic factors like jobs determine the stock market's trend.
Consider this from CNN Money:

Solid corporate earnings coupled with continued demand for new technology bode well for the major U.S. stock indexes. So do expectations of a buoyant economy at home and a recovering one overseas. [emphasis added]

When do you think this article was published?
Well, it's hard to tell because the narrative could fit different timeframes in recent history. Plus, correlating strong earnings and the economy with gains in stocks is all too common.
That article was published on Dec. 31, 1999 -- just two weeks before the DJIA hit a milestone high and then went on to shed nearly 40% of its value through October 2002.
We saw a similar narrative near the 2007 peak. By the time June 2007 rolled around, the Elliott Wave Financial Forecast noted:

Just as advocacy of the New Economy blossomed in early 2000, a wide array of rosy long-term scenarios are now proclaiming "a special time in market history." "This group of extreme optimists believes that global economic strength will keep shares rising for much longer than has been common in previous eras." [emphasis added]

Again, the DJIA topped soon after and went into the worse bear market since the Great Depression.
Now, let's look at what happened when job numbers were weak. On Feb. 6, 2009, a headline said (Center for American Progress):

Job Losses Continue at Accelerated Pace

Wouldn't you know it -- just a month later, the stock market bottomed and went on to quadruple through January 2018. So much for the shrinking U.S. economy in 2009 and the unemployment that hit 10% in October of that year.
Even this brief overview of recent market tops and bottoms makes clear that jobs and the economy FOLLOW the stock market, not lead it.
The belief that jobs reports lead the market is just one myth.
Learn about others in our special, free report, "Market Myths Exposed."
Did you know that the vast majority of portfolios are built on false assumptions? These false assumptions -- or Market Myths -- have been passed down across generations. They are so baked into investor psyche that no one ever thinks to challenge them... but we do. Do earnings really drive stock prices? Can the FDIC actually protect you? Is portfolio diversification a smart move? Download Market Myths Exposed now and find out whether your portfolio is built on flawed foundations. We guarantee you'll be shocked to find the truth.
Sign up now and get FREE access to The Market Myths Exposed eBook.

Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong

See how Elliott wave analysis helped traders reduce risk in Litecoin's recent price action

By Elliott Wave International

Dear readers, if a story about the get-rich-quick promises of cryptocurrency trading is what you seek, keep on moving.
Rest assured, that story exists. It's all over the interwebs, in one form or another: jazzy headlines about average Joe So-and-So turning $1k into $1 million overnight in the crypto markets.
We're not saying it couldn't happen. People do get lucky now and again. It's just that, we're not in the business of luck. We're in the business of using objective analysis to identify high-confidence trade setups in the world's leading financial markets, inscrutable as they may be.
Sure, it doesn't have the same ring to it. But it's honest. And that's invaluable in a hyper-speculative market filled with unscrupulous coin-makers looking to take advantage of unsuspecting traders.
For more, we turn open the pages of our newly minted report Crypto Trading Guide: 5 simple Strategies to Catch the Next Opportunity, where our Cryptocurrency Pro Service analyst, Jim Martens, extols the singular benefit of Elliott wave analysis -- its ability to limit your trading risk:

"When considering a trade, you always want to answer this question first: 'Where will I be wrong?'

"I want to know that risk. For example, a market has been falling and you're expecting a low. All of a sudden, we see what looks like a five-wave advance on a 60-minute chart. At this point, should you take action?

"No, you should wait for a three-wave decline, which would be the correction of that advance."

"Based on one rule of the Wave Principle, I know where this count becomes wrong. [Remember from Chapter 1:] Wave (2) cannot retrace more than 100% of wave (1).

"So, I draw a line at the start of wave 1. If the decline surpasses that level, I know that my count is incorrect.

"Elliott wave analysis is one of few methodologies that give us an absolute number for our protective stop."

In other words, Elliott waves allow you to identify specific points of ruin for every trade before you even start. To see how this plays out in a real-world market, we turn our attention to the August 1 Cryptocurrency Pro Service coverage of Litecoin.
There, our analysis outlined a bullish, 3rd-wave rally -- noting, however, that any upside move was contingent on wave 2 not retracing more than 100% of wave 1, just as Jim explained in the excerpt above.
From the August 1 Cryptocurrency Pro Service intraday forecasts:

"74.50 should therefore be considered the line in the sand for the bullish count. If breached, we'll have to adopt a bearish Alternate as we did for Ethereum to allow for lower before wave C of (Y) finds its bottom."

A few days later, Litecoin prices did, in fact, fall below the 74.50 handle, signaling a resumption of the downtrend. On August 5, our Cryptocurrency Pro Service made the necessary, bearish adjustment:

"74.50 hung in there tenaciously for a while, but was ultimately violated in the weekend's trading. As discussed Friday, that has called up the incomplete wave C Alternate count. "

The next chart captures the rapid descent that followed, bringing Litecoin to an eight-month low in early August before stopping.

We understand the pressure to leap headlong into the blockchain breach is intense. If you subtract the numbers "inflated through fake and deceptive activities," the average daily trading volume of crypto exchange markets is around $6 billion (Aug. 28 CNN).
But we believe there's a way to be smart and discerning about where to leap. With 1600 cryptocurrencies and counting, that starts with choosing only the most reputable markets with proven track records and transparency. Chances are, it won't be named after a comic book character or piece of fruit. Our Cryptocurrency Pro Service tracks the top three cryptos: Bitcoin, Ethereum and Litecoin.
The second requirement of a high-confidence cryptocurrency trade is knowing when your trade is wrong. This is where Elliott wave analysis is in a league unto its own.
Our free report "Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity" explains more. Each chapter shows you the power of the Elliott Wave Principle to explain some of the biggest recent moves in Bitcoin, Litecoin and Ethereum -- and how you can apply this method in your own trading, going forward. Get instant access.

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What's So "Cryptic" About Trading Cryptocurrencies?

Lots and lots. Trading is not easy, period. But a few things can help.

By Elliott Wave International

Here's a cool parlor trick: If you want to bring a loud, rowdy room to a screeching silence, ask if anyone can explain how cryptocurrencies work.
Cue crickets chirping.

Turns out, the "crypto" part of the name originally signified the encrypted nature of digital assets and their anonymous owners. But it's proven foretelling, as cryptocurrencies have become synonymous with a cryptic impenetrability the likes of which no modern mainstream financial market -- especially not one so fervently embraced -- has known.

Even the experts are stumped by the exact logistics involved in cryptocurrencies, as these recent opinions suggest:

• "[Cryptocurrencies] are volatile by nature and thus don't follow traditional rules and conventions." (May 22 Coindiary.net)
• "The public's fascination with cryptocurrencies is tied to a sort of mystery, like the mystery of the value of money itself, consisting in the new money's connection to advanced science. (May 21 The Guardian)

That's the bad news.
But we're happy to bring you the good news; namely: You don't have to understand how cryptocurrencies work in order to forecast them.
For Elliotticians, the ultimate skeleton key to unlocking the mystery price moves of cryptocurrencies is Elliott wave analysis. After all, cryptos, like any other market, are traded in the open marketplace, where big groups of buyers and sellers try to outsmart each other, bidding prices up or down. Whenever large groups of people engage in collective activities, group psychology emerges. And few other market-forecasting tools are as good at predicting changes in market psychology as Elliott waves.
Our new, in-depth report titled "Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity" tells you more.
Here's an excerpt from chapter one:

Strategy #1: Stand Apart from the Crowd's "Madness"

The 2013 Amazon Finance bestseller, Visual Guide to Elliott Wave Trading, states,

"If you aim to be a consistently successful trader, then you must have a defined forecasting methodology -- a simple, clear, and concise way of looking at markets to predict what's coming. Guessing or going on gut instinct won't work over the long run.

"If you don't have a defined methodology, then you don't have a way to know what constitutes a buy or sell signal."

For thousands professional and individual traders around the world, that methodology is the Elliott Wave Principle. If you're new to it, you can summarize its basic tenets as follows:

• Group psychology swings from excessive optimism to pessimism, and back again
• In the markets, group psychology forms repeating patterns in price charts
• Because these price patterns repeat, they are also predictable

Once you know which of the 13 known Elliott wave patterns your market is in, you can make a probability-based forecasts as to what's next."

But what about using this methodology on actual cryptocurrency price charts?
Well, let's pick the world's largest and first-established market, Bitcoin. On July 12, Bitcoin was eight days into a pernicious losing streak with no obvious relief in sight. Wrote one July 12 news source:
"Bitcoin is spiraling downwards, and this time the downside seems unstoppable." (FX Street)
But for our Cryptocurrency Pro Service team, a very telling price pattern emerged front and center on Bitcoin's chart: an Elliott third wave. On July 12, Cryptocurrency Pro Service prepped the bullish stage and wrote:

"A swift move up through 6390.04 will add confidence to the idea wave (ii) has bottomed and Bitcoin is headed higher. A third-wave advance, wave (iii) should eventually see Bitcoin trade well above 7000.00."

The next chart moves forward in time and shows how Bitcoin's prices rose, in-line with the Elliott wave rally scenario:

Here's a New Crypto Report for Your Visitors

Crypto Trading Guide:

5 Simple Strategies to Catch the Next Opportunity

The key to success in cryptos is to approach this wild market in a way that insulates you from the hype, frenzy and rumors -- and helps you act when others flounder.
How? By using a proven market-forecasting methodology that can analyze price trends in Bitcoin, Ethereum and Litecoin objectively and clearly.
Our friends at Elliott Wave International have created a new resource to help your cryptos trading entitled 5 Simple Strategies to Catch the Next Opportunity.
This free crypto trading guide will help you learn:

• The pattern that allows you to anticipate big reversals
• What sentiment does at extremes and how to recognize it
• How to spot the rare feature that precedes a market turn

…and more.
Get instant access now -- for free -- at elliottwave.com.

Why Oil Prices Fell -- Stockpiles or Price Pattern?

Why Oil Prices Fell -- Stockpiles or Price Pattern?
You be the judge...

By Elliott Wave International

Let's cut right to the chart below. The shaded triangle highlights the dramatic price action in crude oil prices on August 15, when crude plummeted 3% to its lowest level in over nine weeks.
Now, according to the mainstream experts, the number one catalyst for crude's collapse was a shockingly bearish same-day Energy Information Administration (EIA) weekly inventory report, marked with the orange arrow in the bottom right of the chart.
What made the report so bearish was the fact that analysts forecast a 2.5 million decrease in oil stockpiles in the week ending August 10, while the EIA data showed a 6.8 million-barrel increase! Wrote one August 15 news source: "Crude Oil Prices Slammed by Surprise U.S. Inventories Build." (Seeking Alpha)
It's a perfect fit -- in the popular, news-moves-markets model, that is. The market was expecting one thing and got the complete opposite. Cue brutal selloff.
The problem with that model, however, is that it does investors and traders no favors. At best, it offers convenient explanations for price moves -- after they've already occurred.
Let's go back to the chart and consider the other arrow, the blue one labeled EWP, for the Elliott Wave Principle.
On August 14 -- one day before the bearish EIA report was released -- our Energy Pro Service identified a bearish Elliott wave setup on crude oil's price chart. There, Energy Pro Service editor Steve Craig outlined the most probable course for crude oil in the days ahead:

"Crude should be in the final leg of a countertrend advance, be it wave ii, or the larger-degree wave ((ii)). Resistance above the 68.37 intraday high is around 68.48 and then 69.11. On the downside, trade below 67.38 would offer an aggressive hint that a downward reversal is underway... the key point is that the larger trend is down."

What happened next?
The chart below sums it up best: Crude oil finished its wave ii and hit the skids in the 3% selloff on August 15.

Elliott wave analysis posits that the main driver of market trends is investor psychology, which unfolds as Elliott wave patterns directly on price charts.
These patterns are measurable and predictable, so they enable Elliotticians to anticipate future price moves -- before they arise.
If you are prepared to take the next step in educating yourself about the basics of the Wave Principle -- access the FREE Online Tutorial from Elliott Wave International.
The Elliott Wave Basic Tutorial is a 10-lesson comprehensive online course with the same content you'd receive in a formal training class -- but you can learn at your own pace and review the material as many times as you like!
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This article was syndicated by Elliott Wave International and was originally published under the headline Why Oil Prices Fell -- Stockpiles or Price Pattern?. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Moving Averages Help You Define Trend – Here’s How

This simple moving average "works equally well in commodities, currencies, and stocksquot;

By Elliott Wave International

The "moving average" is a technical indicator of market strength which has stood the test of time.
Over 30 years ago, Robert Prechter described this indicator in his essay, "What a Trader Really Needs to be Successful." What he said then remains true today:

...a simple 10-day moving average of the daily advance-decline net, probably the first indicator a stock market technician learns, can be used as a trading tool, if objectively defined rules are created for its use.

So, what is a moving average?

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Learn How You Can Find High-Confidence Trading Opportunities Using Moving Averages
Moving averages are one of the most widely-used methods of technical analysis because they are simple to use, and they work. Learn how to apply them to your trading and investing with this free 10-page eBook from Trader's Classroom editor Jeffrey Kennedy.
Begin to improve your trading and investing with Moving Averages today! Download Your Free eBook Now.

---

Elliott Wave International's Jeffrey Kennedy, a 25-year veteran of technical analysis, provides an answer:

A moving average is simply the average value of data over a specified time period, and it is used to figure out whether the price of a stock or commodity is trending up or down.

One way to think of a moving average is that it's an automated trend line.

Kennedy offers an array of examples and insights about moving averages in the instructive guide, "How to Find High-Confidence Trading Opportunities Using Moving Averages." Below, you see some of Kennedy's charts.
Let's begin with the most commonly-used moving averages among market technicians: the 50- and 200-day simple moving averages. These two trend lines often serve as areas of resistance or support, levels the market needs to "respect" in order for the trend to continue.
For example, the circled areas in the chart below show you where the 200-period SMA provided resistance in the DJIA's rally back in April-May (top circle), and the 50-period SMA provided support (lower circle):

Let's look at another widely used simple moving average which "works equally well in commodities, currencies, and stocks," according to Kennedy: the 13-period SMA.
In the sugar chart below, prices first crossed above the red SMA line, which led to a substantial rally. The circled area shows you the first time the price crossed below the SMA, which came to indicate a change in trend from bullish to bearish:

Kennedy's "How to Find High-Confidence Trading Opportunities Using Moving Averages" also informs you about a useful tool to help you avoid "whipsaws."
Indeed, the first two chapters reveal:

• The Dual Moving Average Cross-Over System
• Moving Average Price Channel System
• Combining the Crossover and Price Channel Techniques

Jeffrey Kennedy's insights are all about making you a better trader.
Learn How You Can Find High-Confidence Trading Opportunities Using Moving Averages
Moving averages are one of the most widely-used methods of technical analysis because they are simple to use, and they work. Learn how to apply them to your trading and investing with this free 10-page eBook from Trader's Classroom editor Jeffrey Kennedy.
Begin to improve your trading and investing with Moving Averages today! Download Your Free eBook Now

Dreaming of a "Comfortable Retirement" on a Public Pension?

A 9-year bull market fails to close the pension gap

By Elliott Wave International

Did you realize that many U.S. pension funds are in trouble even though stocks have been rising since 2009?
Even so, many retirees expect a comfortable retirement.

---

Jump on once-in-a-lifetime opportunities and avoid dangerous pitfalls that no one else sees coming. We can help you prepare for opportunities and side step risks that will surprise most investors. You can get deeper insights in Elliott Wave International's new free report: 5 "Tells" that the Markets Are About to Reverse. The insights that you'll gain are especially applicable to the price patterns of key financial markets, including the stock market, now. Read the free report now.

---

Our March 2018 Elliott Wave Financial Forecast showed this chart and said:

Over the last 20 years, [a University of Michigan] poll asked the following question every month: "Compared to five years ago, do you think the chances that you will have a comfortable retirement have gone up, gone down or remained about the same?" Considering that the line between a better and worse retirement is a reading of 100, consumers have been mostly glum about their retirement prospects since the record optimistic extreme of 123 in November 2000.... After stocks had been rising for five years... the survey's results pushed to a high of 105 in February 2007.... The chart shows retirees' negative responses as stocks crashed in 2008 and early 2009....

In March of 2017, retirees finally capitulated once again to the uptrend in share prices by registering a response of 104.... Last month, the survey even pushed to a 17-year extreme of 109.

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FREE REPORT

Dear Reader,
Our friends at Elliott Wave International (elliottwave.com) tell us that the free report you’re about to enjoy is one of their Top 3 Free Reports of 2018!
That says a lot -- because Elliott Wave International is a powerhouse of insightful free content.
So, we wanted to remind you to make sure and not miss their new, free report: "5 'Tells' that the Markets Are About to Reverse.”
This free report shows you the many false indicators – a.k.a. "head fakes" -- investors like you and me see every day – and explains how to avoid these investment traps.
With nearly 40 years in the business, Elliott Wave International has helped investors through bull and bear markets big and small. You can be up-to-speed on what they have to say about today's markets.
Read “5 'Tells' that the Markets Are About to Reverse” now, free.

CRUDE OIL GANN

4 Keys to Crafting Rock-Solid

Trader Case Study: What Happens When You Use Corporate Earnings to Pick Trades
See which data set helped traders stay in front of REGN’s late 2017-early 2018 crash

By Elliott Wave International

According to a June 26 Fortune Magazine article, New York-based bio tech company Regeneron Pharmaceuticals is one of the "100 Best Places for Millennials to Work" in the world. Shares one of Regeneron's employees:
"The thing I love about working at Regeneron is that when they say data is king, they mean it. Our work and projects are always changing based on what the data shows us."
We hear the same expression bandied about Wall Street; data is king to determining a market's price trend, with the long-reigning monarch of that data being earnings reports.
All hail earnings reports? Not so fast!
Our very own senior analyst and long-reigning Trader's Classroom instructor Jeffrey Kennedy admits to the "seductive nature" of earnings data, tempting investors into a false sense of confidence regarding future price action. But there's a danger in such logic, as Jeffrey explains:
"My own experience trading earnings reports has been hit or miss. At the very least, it's been frustrating because there have been times when the earnings report will be positive, and the stock price will decline -- or vice a versa."

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Get immediate access to Jeffrey Kennedy's free 20-minute video, "4 Keys to Crafting Rock-Solid Trades." In this video, Jeffrey reveals his time-proven tricks to ID top trade set-ups in the markets you follow. Learn more now.

Trouble Spotting Market Trends? This Can Help

Learn How You can Spot a Market Trend – Before it Starts

By Elliott Wave International

Let it be stated upfront that there is no perfect way to analyze and forecast financial markets. No crystal balls.
Yet, let's be just as quick to add that in Elliott Wave International's review of market analysis methods, none approach the utility of the Elliott wave model.
The reason for the Elliott wave model's usefulness is easily explained: Elliott waves are reflections of the repetitive patterns of investor psychology, which is the real driver of prices, not news or events.
And, what could be more useful to an investor than a method which helps to identify a financial market's trend -- especially before it gets underway? Well, mastering the Elliott wave model helps you to do just that.
The Wall Street classic book, Elliott Wave Principle: Key to Market Behavior by Frost & Prechter, says:

...action in the same direction as the one larger trend develops in five waves.

Here are illustrations:

Let's now learn how the Elliott wave model identifies countertrend moves within the main trend by returning to Elliiott Wave Principle and additional illustrations:

... reaction against the one larger trend develops in three waves.

Lastly, let's learn how Elliott wave analysis signals the resumption of the main trend.
Elliott Wave International analyst Jeffrey Kennedy says:

A complete Elliott wave cycle consists of eight waves. Upon its completion, a similar cycle ensues....

Again, here are illustrations of the point:

The reason that a market's basic form is five waves followed by three waves is that this is the most efficient method of achieving both fluctuation and progress in linear movement.
Think of it as a variation of nature's "two steps forward, one step back" model of achieving progress.
After all, humans are a part of the natural world, so it only follows that the financial markets, a product of human interaction, would carry the same imprint.
As you might imagine, there are many more details in applying the Elliott Wave Principle to financial markets, and it took an entire book to lay them all out.
The purpose of this article is to simply show you that the price patterns of financial markets unfold according to a repetitive, predictable structure. Familiarity with that structure can help you determine what's next.
Jump on once-in-a-lifetime opportunities and avoid dangerous pitfalls that no one else sees coming. We can help you prepare for opportunities and side step risks that will surprise most investors. You can get deeper insights in Elliott Wave International's new free report: 5 "Tells" that the Markets Are About to Reverse. The insights that you'll gain are especially applicable to the price patterns of key financial markets, including the stock market, now.
Read the free report now.

This article was syndicated by Elliott Wave International and was originally published under the headline Trouble Spotting Market Trends? This Can Help. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Why You Should Brace Yourself for Big Financial Changes
Extrapolating current trends into the future leave many people unprepared for major societal shifts

By Elliott Wave International

The one thing you can count on in financial markets, and society at large, is change.
I was reminded of this when I read this May 18 New York Times' headline and subheadline:

The Last Days of Time Inc.

... how the pre-eminent media organization of the 20th century ended up on the scrap heap.

Time Inc. has been purchased by the Meredith Corporation, which plans to spin off Time magazine, Sports Illustrated, Fortune and Money. All four magazines have suffered from declining ad revenue and declining circulation. There are other details, but the bottom line is that an established media empire, which had a long history of reporting on change, has now been swept up by change.
A generation ago, many observers would not have imagined that a company as iconic as Time Inc. would find itself "on the scrap heap."
But linear trend extrapolation has always had its pitfalls, and on changes that have been on a much bigger scale than one media company, which brings to mind what the 2017 book, The Socionomic Theory of Finance, said:

(1) It is 1975. Project the future of China.

(2) It is 1963. Project the cost of medical care in the U.S.

(3) It is 100 A.D. Project the future of Roman civilization.

In 1975, the Communist party was entrenched in China. ... Would anyone have imagined that China's economic production, in just over a single generation, would rival that of the United States?

In 1963, medical care was cheap and accessible. ... Would anyone have guessed that [today] pills would sell for $2, $20, $200 and even $1,000 apiece?

In 100 A.D., would you have predicted that the most powerful state in the world--the Roman Empire--would be reduced to rubble in a bit over three centuries? Few people of the day imagined that outcome.

Let me add: It's June 13, 2005 -- what were many people projecting for home prices?
Well, here's a Time magazine cover which published on that date:

If that cover was an indicator, most people expected home prices to keep rising. But, we know what happened: Housing stocks topped that very year and the "subprime mortgage crisis" hit about two years later. Eventually, home prices plummeted by more than 50% in some of the nation's high-flying real estate markets. Moreover, the Dow topped in 2007 and then suffered its worst decline in 75 years:

Yes, this dramatic trend change in the Dow also took many observers by surprise.
The reason you should brace yourself for more big financial and economic changes is that EWI's analysis suggests that the next financial change will again surprise the unprepared.
We just released this new, free report, 5 'Tells' that the Markets Are About to Reverse, that reveals many false indicators – a.k.a. "head fakes" -- investors see every day. The report helps readers separate themselves from the herd and survive (and thrive) in volatile markets. Read the free report now.

How This Classic Market Theory Can Warn You of Big Turns

Dow Theory non-confirmations attend the start of every big bear market

By Elliott Wave International

Dow Theory is a time-honored market analysis tool. Its name comes from Charles H. Dow, co-founder of The Wall Street Journal.
In fact, The Wall Street Journal provided a capsule summary :

Dow Theory holds that any lasting rally to new highs in the Dow Jones Industrial Average must be accompanied by a new high in the Dow Jones Transportation Average .... When the transport average lags, it can presage broader stock declines.

In the Wall Street classic Elliott Wave Principle, Frost and Prechter called Dow Theory the "grandfather" of the Wave Principle:

Both [the Wave Principle and Dow Theory] are based on empirical observations and complement each other in theory and practice.

Critics of the theory say it's no longer relevant. They argue that today's economy is less dependent on transportation and more on technology.
But EWI's analysts say this historical indicator is still highly useful to investors.
The Elliott Wave Theorist showed charts of two historic bear markets, and both sported dramatic Dow Theory non-confirmations. Here's the first one (N/C stands for non-confirmation):

You'll notice that in 1999-2000, the transports topped about eight months ahead of the Industrials. Starting in January 2000, the Industrials slid some 40% through October 9, 2002.

In 2007, the transport's peaked about three months before the Industrials. The 2007-2009 bear market was the worst since the Great Depression. The Dow Industrials lost 54%.
A Dow Theory non-confirmation does not accompany every stock market downturn, but the historical record shows that it does attend the start of every big bear market.
If you are prepared to take the next step in educating yourself about the basics of the Wave Principle -- access the FREE Online Tutorial from Elliott Wave International.
The Elliott Wave Basic Tutorial is a 10-lesson comprehensive online course with the same content you'd receive in a formal training class -- but you can learn at your own pace and review the material as many times as you like!
Get 10 FREE Lessons on The Elliott Wave Principle that Will Change the Way You Invest Forever.

This article was syndicated by Elliott Wave International and was originally published under the headline How This Classic Market Theory Can Warn You of Big Turns. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Will Rising Bond Yields Send Stock Prices Tumbling?

Conventional Wall Street wisdom says "rising rates are bad for stocks." Let's put that belief to a test.

By Elliott Wave International

One of the big financial news stories on April 24 was that the 10-year Treasury yield hit 3% for the first time since 2014.
The other big financial news story was that the DJIA closed 424 points lower on that day.
As you probably know, the conventional wisdom on Wall Street is that investors will sell stocks in favor of bonds when yields reach an attractive level. So, it's not surprising that many pundits blamed the DJIA's triple-digit decline on rising bond yields.
Here's a sample April 24 headline along with higher bond yield warnings from the past few months:

• Here's the threat to the stock market from rising bond yields (Marketwatch, April 24)
• Rising bond yields could win next round in battle with stock market (CNBC, Feb. 7)
• How Spiking Bond Yields Could Topple a Stock Market Rally (Bloomberg, Feb. 4)

But, is the conventional wisdom that says higher bond yields will send stocks lower correct?
Well, our research reveals that there is no consistent correlation between interest rates or bond yields and the stock market.
Take a look at these charts from Robert Prechter's 2017 book, The Socionomic Theory of Finance:

The book notes:

Figure 2 shows a history of the four biggest stock market declines of the past hundred years. The graphs display routs of 54% to 89%. In all four cases, interest rates fell, and in two of those cases they went all the way to zero. ... [Conversely, Figure 3 shows when stocks climbed as interest rates climbed].

[Yet,] there have been plenty of times when the stock prices rose and interest rates fell. It happened, for example, in the period from 1984 to 1987, when stock indexes more than doubled while interest rates fell by half, [as Figure 4 shows].

[Looking at Figure 5,]. there have also been times when stocks fell and interest rates rose, as in 1973-1974 when stock indexes dropped nearly in half as interest rates doubled.

So, you can see why it's folly to forecast the stock market based solely on the direction of rates. What’s more, this lack of "cause and effect" doesn't just apply to interest rates.
In fact, our research shows that there is not a single factor outside of the stock market itself that determines the trend of aggregate stock prices.
Elliott Wave Principle, the Wall Street classic book by Frost & Prechter, says:

Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own.

We call that law the Elliott Wave Principle.
If you are prepared to take the next step in educating yourself about the basics of the Wave Principle -- access the FREE Online Tutorial from Elliott Wave International.
The Elliott Wave Basic Tutorial is a 10-lesson comprehensive online course with the same content you'd receive in a formal training class -- but you can learn at your own pace and review the material as many times as you like!
Get 10 FREE Lessons on The Elliott Wave Principle that Will Change the Way You Invest Forever.

This article was syndicated by Elliott Wave International and was originally published under the headline Will Rising Bond Yields Send Stock Prices Tumbling?. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Elliott Wave

Know These 5 Core Elliott Wave Patterns – Know 80% of Chart Setups

Dear Reader,
Our friends at Elliott Wave International (EWI) often say that one of the fastest ways to learn Elliott is to test your knowledge in real markets.
So, they’ve put together 5 free, short videos where Jeffrey Kennedy, the editor of EWI’s popular service for traders seeking to improve, Trader’s Classroom, shows you 5 charts of U.S.-traded stocks -- and then...
...And then, Jeff in turn asks YOU to identify one of those 5 developing “core” Elliott wave patterns.
It’s a fun way to brush up on your Elliott or learn the basics of the method!
You’ll get a free chance at recognizing Elliott wave setups in the charts of Ferrari (RACE), Hershey (HSY), Eli Lilly (LLY), Avago Technologies (AVGO) and Disney (DIS). The charts are fresh, so you should be ready if some of your Elliott wave labeling uncovers ongoing opportunities in these stocks!
Of course, in each video Jeffrey Kennedy will also show you the correct wave labeling, so you can compare notes with an expert. Jeffrey Kennedy (MSTA, CFTe, CMT, CEWA-M), is EWI’s Senior Instructor with 25-plus years of experience as an analyst, trader and teacher. Students always comment on how committed Jeffrey is to equipping them to achieve trading success.
We think you’ll love these 5 free videos.
Are you ready for the challenge?
Start watching now - free.

Bitcoin crashes below $10,000. What's next? We have answers…

Dear Reader,

 
"Wild" doesn't begin to describe Bitcoin's price action.
Less than 12 months ago, it traded as low as $1,200. By early December, it hit a high of $19,891 – and on the CBOE, Bitcoin futures topped $20,000.
Then, on December 22, Bitcoin crashed to $10,400… then rebounded as high as $17,000 into January... and now, it's again trading in the $10,000 range.
Are you wondering what’s next for Bitcoin and cryptos?
Our friends at Elliott Wave International just released a new, free report: “Bitcoin: The Greatest Bubble of All Time.”
In their nearly 40 years in the business, EWI has applied Elliott waves to hundreds of different markets -- some mainstream, some exotic. When they first studied cryptocurrency charts, they saw familiar price patterns. Yes, Elliott waves are at work in this brand-new asset class just as they are in the established markets.
EWI was one of the first (possibly the first) financial publishers to ever talk about Bitcoin back in 2010.
Which means, you need to hear what Elliott wavers have to say about it now.
Read “Bitcoin: The Greatest Bubble of All Time” now, free.

Discover 3 High-Confidence Trade Set-Ups Every Trader Should Know

Dear Trader,
The new year is full of new market opportunities. We'd like to help you capture them.
On Wednesday, January 17, at 11 AM Eastern, our friends at Elliott Wave International (elliottwave.com) are hosting a live, free webinar for traders looking for an edge:

"Discover 3 High-Confidence Trade Set-Ups Every Trader Should Know"

EWI's Senior Instructor, Jeffrey Kennedy, will share with you something only his Trader's Classroom subscribers know -- his 3 favorite trade set-ups. Of all the trade set-ups Jeffrey has tested over his 25+ year career, he says these 3 offer the highest confidence with the lowest risk.
Simply put, this free event will show you how to jump on opportunities most traders will miss.

Register now -- free

Why you should join: Broker statistics show that over time, up to 90% of all traders "fail to show a profit." Most traders simply don't know when to enter, when to exit, and when to call it quits.
It takes work, but you can be a part of the 10%.
Jeffrey Kennedy's live January 17 webinar can help you get there. Get your free seat now.