Get the answer to your question from Coach John G. Agno. What we all want is interaction with others to clarify our thoughts before taking action and to allow our perceptions to evolve over time.
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See examples of a head-and-shoulders pattern in a chart of SPY
By Elliott Wave International
A head-and-shoulders pattern is one of the most well-known classic chart patterns. In this 4-minute video from Jeffrey Kennedy's Trader's Classroom, you'll see an example of a bearish head-and-shoulders formation and a bullish, inverted head-and-shoulders pattern in the chart of SPY, the ETF that tracks the S&P 500. You'll also learn how to calculate the minimum expected target for the pattern.
Learn How Technical Indicators Can Give Your Trading The Edge
In this free report, you will learn some of the most effective tools of the trade from analysts at Elliott Wave International. Find out which technical indicators are best for analyzing chart patterns, which are best for anticipating price action, even which are best for spotting high-confidence trade setups -- plus how they all complement Elliott wave analysis.
This article was syndicated by Elliott Wave International and was originally published under the headline Learn to Recognize a Popular Old School Chart 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.
Editor's note: This article is from Elliott Wave International's brand-new investment report, "U.S. Investors Face a Giant, Historic Bubble." It originally appeared in the April issue of The Elliott Wave Financial Forecast, published March 27, 2015. For a limited-time, EWI has agreed to give our readers exclusive free access to the full report. Please click here to read it now.
In March, we covered the return to a popular fascination with technology.
The striking resemblance to 2000's technology mania is not going unnoticed. How can it?
With the NASDAQ's much heralded return to 5000 and magazine covers proclaiming "Google Wants You To Live Forever," concern about an "asset bubble" is being raised. But this is actually another throwback to early March 2000, when the NASDAQ reached its all-time high and the Financial Forecast remarked on a "public ambivalence toward warnings of any kind."
The March issue of The Elliott Wave Theorist explains that while people may remember some of the details, they "forget their prior mood and rationalize present extremes into normality."
This March 7 headline from a major financial paper offers a perfect example of how this "normalization" works: "Forget 2000. It's a Different Investing Ballgame." Really? Yeah, really. "It really is different this time," says another. "The crazy valuations seen at the turn of the millennium -- when silly concepts, such as collecting eyeballs, attracted billions of dollars from breathless speculators wanting to get in on the new, new thing -- are absent."
There's just one problem with this assessment, it's not accurate. Here's the reality, or should we say surreality, as depicted in Bloomberg on March 17:
The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech Companies
The article discloses how companies are shooting to "astronomical valuations," mostly with Internet ideas that capture people's bullish imaginations and, as in 2000, cause them to look beyond mundane things such as cash flow and profits. Once again, such stone-age metrics are less important than "the number of people using the product" and "whether they pay for it. Investors salivate over what's called 'hockey-stick' growth curves, indicating massive uptake. Costs, especially operations costs, are largely ignored."
As in 2000, the fever has been spreading fast. According to Bloomberg, start-ups with billion-dollar valuations were once dubbed "unicorns" because of their rarity. Now, Bloomberg counts more than 50 of them. Many have expanded ten-fold, so a new buzzword, "decacorn," now applies to those with capitalizations of more than "$10 billion, which includes Airbnb, Dropbox, Pinterest, Snapchat and Uber."
Of course, the driving force behind many of these investments is the same--a fear of missing out (FOMO).
"A severe case of FOMO can cause some to do crazy things to get into the hottest deals," says Bloomberg. This is exactly what the Financial Forecast said in March 2000, when we explained why people fail to heed ample warnings in the final throes of a mania: "Acting on such an opinion might mean missing something on the upside. 'The average person must ride it out,' says [a] Nobel Prize winner. Quotes such as these will deserve preservation in bronze when the bear market is mature." Clearly, that time still lies ahead.
For compelling Elliott wave evidence of a culmination of the Mania Era, see the five-wave advance in the share price of the current technology leader, Apple Inc., on page 3 of the March Elliott Wave Theorist. As the Theorist notes, after rising more than 14,500% over the past 12 years, S&P Dow Jones Indices added the stock to the Dow Jones Industrial Average on March 19.
This is one more remarkable parallel to the prior technology mania, as Microsoft was added to the Dow Industrials just prior to its January 2000 top. Here's how EWFF interpreted its addition in November 1999:
The ultimate concession to technology is due November 2, when Microsoft will be inducted into the Dow Jones Industrial Average. For most of the bull market, the world's most dominant stock was excluded from the world's premier blue-chip average. But just as RCA was added to the Dow in October 1928 (and removed in 1932), Microsoft has assumed its rightful place at the head of the pack, in time to lead the way down.
Apple has just been acknowledged in the same way and for the same reason. The pressure to pile onto the technology bandwagon has proved irresistible to the Dow's purveyors. This has generally happened when the most important stock market reversals were at hand.
Editor's note: This article is from Elliott Wave International's brand-new investment report, "U.S. Investors Face a Giant, Historic Bubble." It originally appeared in the April issue of The Elliott Wave Financial Forecast, published March 27, 2015. For a limited-time, EWI has agreed to give our readers exclusive free access to the full report. Please click here to read it now.
Senior Analyst Jeffrey Kennedy outlines three important Elliott wave patterns in three markets
By Elliott Wave International
See how three Elliott wave patterns develop -- in Cliffs Natural Resources Inc (CLF), iShares Russell 2000 Index (IWM) and Direxion Daily Financial Bull 3X Shares (FAS) -- in this classic 5-minute video excerpt from Jeffrey Kennedy's Trader's Classroom service.
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!
This article was syndicated by Elliott Wave International and was originally published under the headline Learn the Basics of Corrective Waves. 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.
Deflation is a decline in the supply of money and credit relative to goods and services in an economy.
History shows us that the most important deflationary episodes are invariably accompanied by comparable declines in equity, factory and retail prices.
The most pronounced deflations in U.S. history occurred during the Supercycle-degree declines that began in 1835 and 1929. The 2000-2002 stock market decline coincided with the steepest fall in year-over-year CPI since 1964. The 2007-2009 bear market featured outright negative readings in year-over-year CPI, the biggest contraction since 1949.
As we noted The Elliott Wave Financial Forecast last month, this time around, wholesale and consumer prices are already approaching outright declines; this weakness confirms the potential for a bear market that is bigger than that of 2007-2009.
With the major stock indexes still near their all-time highs, indicating that optimism is still the reigning attitude, pundits are proclaiming the potential benefits of deflation.
"It's like we've had a big tax cut," says an Oxford economist. The same economist coined the term "Joyflation" to "describe the combination of the oil-driven slowdown in inflation and accelerating economic growth."
Another headline generated by a formerly bearish economist says low oil prices "Could Be Market 'Nirvana.'"
Over the course of 2014, we charted this attitude's emergence. These more recent headlines capture the progression nicely:
Deflation Hits The Eurozone - BBC, January 7, 2015
Asia Staring At Deflation - Bloomberg, January 13, 2015
The U.S. Welcomes the Good Kind of Deflation - Business Week, January 22, 2015
With "employers showing more confidence than they have since the Great Recession," the Associated Press concluded that the economy in 2015 is on track for "the fastest growth in a decade."
Consumers are happy, too.
On Jan. 28, the Conference Board's Consumer Confidence Index rose "to its strongest level since mid-2007 due to falling gasoline prices." The surge to 102.9 is the highest reading since August 2007, which was one month after the Dow Jones Composite index peaked that year and two months from the associated peak in the Dow Industrials. During the ensuing bear market wave of 2007-2009, consumer confidence fell with stocks to a 50-year low of just 25.3 in February 2009.
This article was syndicated by Elliott Wave International and was originally published under the headline Here's What's Wrong with the 'Good' Deflation Argument. 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.
Michigan-based Aysling, a provider of marketing software solutions and digital media production services, announced it has completed chronicling dozens of issues from the Newsweek magazine library across multiple platforms.
The weekly news magazine, founded in 1933, enjoys a global circulation in excess of 1.5 million and readers will now be able to browse through nearly 70 back issues of the magazine on their smartphone, iPad or personal computer.
As an Adobe Digital Publishing Suite (DPS) partner, Aysling provided proprietary KickStart Adobe DPS training for the Newsweek staff. Utilizing Adobe Digital Publishing Software (Adobe DPS & Adobe Creative Cloud), Newsweek created their new app and their newest issues are enhanced by video, audio, animation and other interactive elements to fully complete the user’s tablet experience.
“Aysling’s expertise with Adobe DPS was key to building interactive apps that enhance the reader experience,” said Oliver Tree, Director of Business Development. “And the Aysling team’s flexibility with our aggressive deadline allowed us to provide our readers with the historical content we know they’d be looking for when we launched the apps.”
Aysling teamed with Newsweek staff to build three tablet apps for the Apple, Kindle and Google Play platforms for 66 back issues of the magazine in less than a month’s time.
“Everyone at Aysling was thrilled to work with such a well-known and respected brand,” said Sheila Magie, Aysling’s Vice President of Design. “Our team showed a lot of flexibility and expertise with Adobe DPS in bringing this project together for Newsweek.”
Ms. Everson said, "I think the biggest shift we are going to see, which is not just a shift for 2015, is to people-based marketing. Until we had mobile, marketing was very much based on reaching mass audiences. Now people are in control of their content experience on their mobile device. They can choose which apps to download. They can choose where they get their news and their entertainment.
I, with my iPhone 5S and my Kindle Reader, may be an anomaly in the world of Apple fans who obsess over the latest features and line up outside stores for new releases even if last year's model works fine.
However, it's characteristic of a shift in consumer thinking that poses a problem for the tech industry. Seven years after the introduction of the iPhone that I paid $650 for, mobile devices are closer to commodities than novelties.
We now know exactly where PCs are invaluable and where the usefulness of smartphones and tablets begins and ends. As a result, mobile prices are falling, and manufacturers are competing most fiercely at the bottom.
The features that used to distinguish new releases are becoming more standard across the industry, pushing down prices. According to research firm IDC, the average price for smartphones fell from $335 in 2013 to $314 this year...and...are projected to sink to $267 by 2018. Drooping margins make it tougher to recover from a misstep within the mobile industry.
A moving average (MA) is one of the simplest technical tools an analyst or trader can use. The most common one is the simple moving average (SMA). A 200-period SMA often determines trend, support and resistance. Dual moving averages, which are popular, are the basis of many trading systems.
In this 6-minute video lesson, Elliott Wave International's Jeffrey Kennedy explores different types of moving averages and how you can apply single, dual and multiple moving averages on your charts.
If you enjoy this lesson, then join Jeffrey for Trader Education Week, a free week of lessons on how to apply Elliott wave and other technical methods to identify trading opportunities on your charts.
This article was syndicated by Elliott Wave International and was originally published under the headline (Video) How to Apply Moving Averages as a Trading Tool. 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.
Interview: Our global markets expert Chris Carolan talks opportunities across Europe and Asia
By Elliott Wave International
Enjoy this 7-minute interview with Elliott Wave International's global opportunities expert Chris Carolan.
You will learn where Chris sees the best market opportunities unfolding in both Europe and Asia right now.
Chris also tells you how he combines Fibonacci and Keltner channel analysis with Elliott waves -- to spot trades. That's the kind of useful information every ETF and futures trader needs to know.
SPECIAL OFFER: For a limited time, you can get more insights from Chris and save 66% on both The Asian-Pacific Short Term Update and European Short Term Update for 3 full months (only $99 for 3 full months). Try his service risk-free now >>
SPECIAL OFFER: For a limited time, get more insights from Chris at a special rate of only $99 for 3 full months. (You save 66%!). Try his service risk-free now >>
For over fifty years, I have tied my shoes the same way.
Then while getting a shoeshine at the airport, the shoe shiner told me that I didn't have to double tie them in order to keep my shoelaces well-tied.
He said that if I tied my laces by looping the lace under, rather than over the loop, I would tie a "square knot" that would hold. Every sailor knows how to tie a square knot but it took fifty years for this knowledge to get to me.
Just like tying your shoes correctly, there are many principles in life that we don't know, we don't know.
For example, we have all heard the sayings, "It's not what you know but who you know that achieves success" and "Do unto others as you would have them do unto you" but most of us still believe in the myth of individualism. We embrace this myth and go about our lives believing that it is solely up to us to achieve success---without depending on the help of others to get what we want. Yet, as hard as we try, we can't seem to get it done alone.
Through reading Dr. Wayne Baker's book (based upon principles like the "small-world principle" and the "Law of Reciprocity"), I found out about things I didn't know existed and how to use them to improve my life.
