Macroeconomic news supposedly explains only about one fifth of the movement in stock prices but if there is no accommodating theory, then the presumed causality involved is tenuous at best. Let me explain.
Read More »True or False: An Expanding Trade Deficit Is Bearish For Stock Market?
Q: Is it correct to assume throughout that an expanding trade deficit impacts the economy negatively? A: No, the relationship, if there is one, is that there has been a positive -- not negative -- correlation between the stock market and the trade deficit. Let me explain.
Read More »True or False: Rising Oil Prices Are Bearish For Stocks (+2K Views)
A sensible story of causation regarding oil prices and stock prices made by countless economists is that "rising oil prices increase the cost of energy and therefore reduce corporate profits and consumers' spending power, thus putting drags on stock prices and the economy." Stunningly, as far as I can determine, however, no evidence supports that claim, as the discussion below will show.
Read More »True or False: Earnings Drive Stock Prices
The belief that earnings drive stock prices powers the bulk of the research on Wall Street but this glaring exception to the idea of a causal relationship between corporate earnings and stock prices challenges that theory. Let me explain.
Read More »Many Economic Cycle Theorists Believe 2014 to 2020 Is Going To Be Pure Hell For the U.S.! (+3K Views)
Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades - and there are many economists who believe that the period from 2014 to 2020 is going to turn out to be pure hell for the United States.
Read More »Ignore Guru Opinions: 66% Get It WRONG More Than 50% of the Time! Here’s How They Compare (+2K Views)
Can experts, whether self-proclaimed or endorsed by others (publications), provide reliable stock market timing guidance? Do some experts clearly show better intuition about overall market direction than others? [NO is the answer to the first question and YES to the second. Let us explain how we came to those conclusions.] Words:360
Read More »Robert Prechter's Elliott Wave Theory: Dow Set to Tumble to 8,000
U.S. stocks could sink by more than 20 percent if the neckline of a head-and-shoulders pattern on the Dow Jones Industrial Average is breached, according to Robert Prechter’s Elliott Wave International Inc. Words: 524
Read More »Robert Prechter: Grams of Gold are the Best Currency But…(+2 K Views)
Have you ever traveled abroad and taken a look at the local currency and wondered how the citizens of that country could take seriously what looks like “Monopoly money?” I’ve got news for you: You’re using the same stuff. Monopoly money is the money over which some government has a monopoly. It is the currency of the realm only because the state makes it illegal to use any other type. Words: 633
Read More »Prechter: Technical Indicators Point Down from Here
In his April 2010 issue of the Elliott Wave Theorist Prechter predicted that these same eight indicators would switch from bullish to bearish by May 7th. Considering the events on May 6th and 7th he is once again sounding prophetic. This is extremely important as the media would have you believe that the events of May 6th were the result of a "fat finger". Words: 1154
Read More »5 Major Market Myths Exposed! (+2K Views)
Robert Precther recently published a list of market myths for his subscribers which I'm sure he won't mind if I review the lessons he voices in his article with you, borrowing from his excellent research to help make the arguments. Recognizing these market myths are critical to your success as an investor. Words: 1266
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