A common claim from economic and stock market observers is that a rising trade deficit is injurious to the economy — hence, bearish for stocks. On the other hand, a falling trade deficit is commonly believed to be bullish for stocks.
Back in December, we wrote an article titled “Interest Rates Win Again as Fed Follows Market.”. In the piece, we noted that while most experts believe that central banks set interest rates, it’s actually the other way around—the market leads, and the Fed follows.
The pinhole puncture in the global “Fintech” bubble keeps growing, despite drastic attempts to seal it shut. The most recent and radical attempt occurred on February 18, when BaFin, Germany’s financial regulator, issued a temporary short-selling ban in Wirecard after its shares plunged 40% in less than three weeks. Wrote one news source, “Germany bans speculative attacks on Wirecard stock”, as if those shorting the market were wielding pitch forks and lobbing actual threats against the stock’s upside.
For more than two decades, Elliott Wave International has tracked the relationship between interest rates set by the marketplace and interest rates set by the U.S. Federal Reserve and found that it’s actually the other way around–the market leads, and the Fed follows.
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.
October included a market phenomenon that left many economists and commentators scratching their heads. US stocks and oil prices both dropped simultaneously. In fact, it was the worst month for oil in 2 years and the worst month for S&P 500 in over 7 years. What was the “phenomenon”? Well, conventional wisdom says that rising oil prices are bearish for stocks. So, how could falling oil prices also be bearish for stocks?
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.
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.
Successful Traders “Learn to Do Something That Almost No One Else Can Do” Why successful financial speculators are so rare By Elliott Wave International Most market speculators dream about trading their way to wealth. But, also, most discover very quickly that their list of trading “dos” and “don’ts” are just not sufficient. The hard, cold […]
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.
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:
On July 31, you are invited for a rare, free opportunity to see for yourself how to use simple, everyday price charts to find reliable trade setups — in any market and any timeframe. This free event is hosted by our friends at Elliott Wave International. The webcast features two of the world’s leading technical analysts: