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October 2016 | Elliott Wave Analytics

  • Stupid Stuff: Late-2016 Edition
    By on October 27, 2016 | No Comments  Comments
    Cyclical turning points tend to feature large numbers of people doing and saying what in retrospect turn out to be amazingly dumb things. Think GM highlighting its line of Hummers just before an oil price spike bankrupts the company. Or half the world betting that tech stocks with infinite P/E ratio...
  • Gold Green Lights Upleg!
    By on October 26, 2016 | No Comments  Comments
    Gold’s early-October plunge on futures speculators’ stop losses being run has naturally left this metal mired in battered technicals and bearish sentiment.  But that sharp selloff has already accomplished its rebalancing mission.  The excessive gold-futures trading positions that triggered tha...
  • More Good News For Gold Bugs: The Bottom Is Getting C...
    By on October 26, 2016 | No Comments  Comments
    In the latest gold and silver commitment of traders (COT) report (click here for an explanation of what this report involves), paper players made big strides in bringing the market back into balance — and setting the stage for an eventual rebound. Speculators – who tend to be emotional and there...
  • A New Look NYSE Margin Debt and the Market
    By on October 26, 2016 | No Comments  Comments
    The NYSE has released new data for margin debt, now available through August. The New York Stock Exchange publishes end-of-month data for margin debt on the NYX data website, where we can also find historical data back to 1959. Let’s examine the numbers and study the relationship between mar...
  • Market Cap to GDP: An Updated Look at the Buffett Val...
    By on October 21, 2016 | No Comments  Comments
    Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that “it is probably the best single measure of where valuations stand at any given moment.” The four valuation...
  • Yes, You Should Worry About Market Corrections
    By on October 20, 2016 | No Comments  Comments
    One of the biggest reasons why investors consistently underperform over the long-term is primarily due to the extremely flawed advice promoted by Wall Street, because they have a product or service to sell you, and the media, because they don’t know better. The latest bit of advice that you should...
  • Great News For Gold Bugs: The COT Report Is Playing O...
    By on October 19, 2016 | No Comments  Comments
    This year’s recovery in precious metals prices – and the sudden spike in gold/silver mining stocks – convinced a lot of people that a new bull market had begun. Last week’s brutal smack-down scared the hell out of many of the same folks. The latest commitment of traders (COT) report implies ...
  • The Next Recession Looms Large
    By on October 18, 2016 | No Comments  Comments
    Currently economists and market watchers roughly fall into two camps: Those who believe that the Federal Reserve must begin raising interest rates now so that it will have enough rate cutting firepower to fight the next recession, and those who believe that raising rates now will simply precipitate ...
  • Gold Stocks Screaming Buy!
    By on October 17, 2016 | No Comments  Comments
    The gold miners’ stocks are suffering from universal and overwhelming bearishness today, with nearly everyone expecting further selling.  That’s the natural reaction following this sector’s recent massive correction, which climaxed in one of its biggest daily plummets ever witnessed.  But wi...
  • US Labor Outlook: Possible Sharp Downturn in 2017
    By on October 14, 2016 | No Comments  Comments
    Here is how I view employment: When margins get squeezed and sales slow, one of the first ways businesses respond is by slowing down temp hiring. Then, as trends continue to worsen, businesses start to let go of their temp employees altogether while cutting hours on their full-time staff. Finally, ...
  • The Q Ratio and Market Valuation: September Update
    By on October 12, 2016 | No Comments  Comments
    The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It’s a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Fortunately, th...
  • Technically Speaking: 2400 Or Bust!
    By on October 11, 2016 | No Comments  Comments
    In yesterday’s post on the tools companies use to “manipulate” earnings, I referenced a tweet I received discussing the markets next move to 2400. “Of course, the issue ultimately comes down to valuations. At a price of 2400, based on current earnings per share of $86.92, the market would b...
  • Can You Imagine The Fed Raising Rates In This World?....
    By on October 11, 2016 | No Comments  Comments
    I know it’s bad form to express sympathy for the people running the world’s central banks. But come on, they’re human beings in an impossible spot with no idea how to escape. The pain they feel is both intense and legitimate, and we should respond with at least a bit of empathy. Just kidding....
  • Regression to Trend: Another Look at Long-Term Market...
    By on October 10, 2016 | No Comments  Comments
    About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let’s apply some simple regression analysis (see footnote below) to the question. Below is a chart of the S&P Composi...
  • Silver Way Undervalued
    By on October 5, 2016 | No Comments  Comments
    After rocketing higher mid-year, silver has spent most of the third quarter drifting sideways to lower.  This has naturally weighed on sentiment, with investors and speculators alike growing more bearish during recent months.  Yet silver remains way undervalued relative to its primary driver gold,...
  • 3 Things: Confidence Peak, Dumb Money & Bonds Ar...
    By on October 4, 2016 | No Comments  Comments
    It was interesting to see the markets reaction to the Consumer Confidence report on Tuesday, along with some of the media headlines, to wit: “Consumer confidence just surged to its highest level since the recession. The latest reading on consumer confidence from the Conference Board came in at 10...

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