Tools for Technical Analysis
Waves of social mood fluctuate in accordance with the Wave Principle and determine prices in financial markets. Moreover, these same waves regulate the tenor and character of social attitudes and actions. The key point is that social mood is the cause. It is endogenous. Prices in financial markets and events in society are the effects. They are exogenous.
However, most people believe the opposite is true.
Over the last year, bitcoin has increased by over 400%. As a matter of fact, it has more than doubled since the July low. In today’s article, we are going to look at whether news or even government actions affect the price of bitcoin. In the article, it refers to a proclamation made on July 2, where Elliottwave International says that the downtrend was ending… and then Bitcoin rose throughout July and August, fell through September (bottoming on September 28th), and then it began to rise again. ~Tim McMahon, editor.
Over the last few months, we’ve been warning that caution is the word of the day. The market was concerned that the FED’s September Statement would include provisions for tightening. That doesn’t seem to be their stance for the near future at least. But that doesn’t mean that the market is going to skyrocket either. As we can see in the following chart of the NYSE, the market definitely leveled off over the summer (despite the FED pumping $120 billion per month into the economy).
There’s one indicator that many investors overlook, and that’s the weekly change in “sight deposits” at the Swiss National Bank. This chart helps show when a financial panic could be building.
As you probably know, Hurricane Ida hit Louisiana on August 29, the exact date that Hurricane Katrina made a Louisiana landfall sixteen years earlier.
On August 30, the Wall Street Journal said:
Oil Industry Surveys Damage After Hurricane Ida Slams Louisiana
The storm disrupted fuel supplies, and the speed of the recovery will depend on how long it takes for refineries to come online amid flooding and power outages.
Did oil prices skyrocket due to the disruption in oil production? Well, Bloomberg reported (August 30) that prices initially fell 1.6% [as Ida made landfall] before they “edged” higher.
Ever since my Boy Scout days their “motto” of “Be Prepared” has been my guiding philosophy. Buying when things are plentiful is much better than fighting the crowds when things are scarce. (Think toilet paper in 2020). Unfortunately, “hoarding” has gotten a bad name because some individuals try to buy up all the scarce supplies WHEN THEY ARE SCARCE but if you buy when they are plentiful, it isn’t hoarding… it is being prepared. And rather than being a bad thing… it is actually a good thing. Here’s why: If you have your own supply you won’t be competing with the unprepared for the scarce resources. You may even have enough to share some with your friends and neighbors. In today’s article by Elliottwave International, we’re going to look at scarcity and its companion austerity and how they relate to the cost of money. ~ Tim McMahon, editor
Most stock market investors get fooled at major price turns. Why? Because a bottom never feels like a bottom and a top never feels like a top – how many bears could you count in 2007, right before stocks tanked and the Great Recession followed? This idea was embodied by the quote attributed to Barron Rothschild, an 18th-century member of the Rothschild banking family. He said that “the time to buy is when there’s blood running in the streets.”
High “Beta” stocks tend to move in the same direction as the overall market but at a multiple of the overall index. So for instance, if the overall market is up 2% a high beta stock might be up 3% or 5%, or even 10%. “Meme” stocks are those that have gotten a lot of publicity on Social Media and also tend to be high beta stocks as well. Index stocks are those that make up a particular index and are often most volatile when first added or removed from an index. Today’s article covers the convergence of all of these three factors on June 25th.
The fear of missing out (FOMO) is a powerful narcotic that often affects market participants near the top of a cycle. And before long, you hear the “bag-boy” at the supermarket bragging about his “portfolio”. When that happens it is time to follow Warren Buffet’s sage advice and “Be fearful when everyone else is greedy and greedy when everyone else is fearful.”
Often, as traders and investors we start off with an open mind about playing the field, so to speak. We watch the news, listen to friends and colleagues — and we try to apply what’s known as “fundamental” market analysis to make our trading decisions. Soon, though, we start to realize that the “bullet-proof” logic of “fundamental” analysis is not Kevlar, but a piece of cardboard. We see markets fall after good news; rally after bad; and go sideways, defying both bulls and bears. That’s when we realize that trading is not as easy as it seems.
As Elliott Wave International has noted many times, the mainstream financial press always tries to find a reason for a given trading day’s stock market action.
In other words, if stocks happen to be up for the day, many financial journalists will say it was because of this or that “positive” news. If stocks happen to be down for the day, you got it, these journalists will ignore the positive news and search for something “negative” that happened in the country or world and say that was the reason stocks went down.
