The Stock Market’s Wave Structure: History Repeating

Traders Blog | Wednesday 7 July 2010
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For those of us living in the United States, there’s definitely one thing getting barbecued this holiday weekend: porterhouse stock values. To wit: On June 30, the Dow Jones Industrial Average closed out Q2 of 2010 with seven straight negative trading sessions. History shows this was the market’s longest losing streak since October 2008 AND worst pre-July 4th week in percentage terms (down 5%) since Charles Dow founded the index in 1896.

Year-to-date, the April to June rout leaves all three blue-chip benchmarks in negative territory — minus 6.27% for the Dow, minus 7.57% for the S&P 500, and minus 7.05% for the NASDAQ — AND at new lows for the year across the big board.
To make matters worse, just when the need for clear, nerve-assuaging answers is at its greatest, the mainstream experts drop the ball, Robert Green style. “Analysts seem to be taking a wait-and-see” stance to stocks, explains a July 1 CNN Money report. The hope is, in six to 18 months, the fog of uncertainty surrounding the biggest fundamental markers — earnings, economic data, and Eurozone woes — will lift and reveal the trends ahead.
Trouble is, time is not a luxury the average investor can afford. Fortunately, they don’t have to.

On page 2 of the brand-new July 2010 Elliott Wave Financial Forecast, our team of expert analysts reveal how the long-term trend underway in US stocks has never been clearer. As it turns out, the current wave structure in the Dow Jones Industrial Average is nearly identical to another pattern that emerged in recent stock market history. Here, the following chart puts the likeness into visual perspective:
In the top column, the featured wave pattern preceded a powerful turn that saw a 30%-plus change in the S&P 500′s value in less than four months; the bottom chart shows you the current wave setup. What are the odds of such a scenario playing out again?
Find out today via a risk-free Financial Forecast Service subscription.

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