Author: Blasher

Buyers Scoop Up U.S. Shares

Overseas Buyers Scoop Up U.S. Shares (Bullish or Bearish)?
“No crowd buys stocks of other countries intelligently”

By Elliott Wave International

The fact that investors from other countries are feverishly buying U.S. stocks might seem like a bullish sign.

On the other hand, consider what Robert Prechter said in his book, Prechter’s Perspective:

No crowd buys stocks of other countries intelligently. For decades, heavy foreign buying in the U.S. stock market has served as an excellent indicator of major tops.

Some of the heaviest foreign buying — whether it’s in the U.S. or another country — tends to occur when a trend is near or at an end.

Looking at an example: In the late 1980s, after years on the sidelines, foreigners became net buyers of Japanese stocks. This coincided with the ending phase of one of the biggest bull markets in history.

Returning to the U.S. but sticking with roughly that same period of history, here’s what the Sept. 2000 Elliott Wave Financial Forecast, a monthly Elliott Wave International publication which covers 50-plus financial markets, had to say as it showed this chart:

ForeignersBuyHighs

This chart of the Dow and foreigners’ net purchases of U.S. equities illustrates how beautifully the pattern has held through the U.S. bull market of the 1990s. The solid lines show the flood of foreign buyers within a month of each high, and the dotted lines show them rushing back out again on the months of the big lows. Early in the decade, when stocks were a bargain, foreigners were net sellers. They did not sustain net purchases until the Dow crossed 8000 in 1997.

By the way, overseas buyers also zealously bought U.S. shares right before the 2007 top.

As a quick reminder, the reason for mentioning all of this is what I said at the outset about feverish overseas buying of U.S. shares presently. Here are more details via this chart and commentary from our March Financial Forecast:

ForeignBuyersRushIn

Foreigners are surging back into U.S. equities. At $42.9 billion in November, the latest reading of foreign purchases is higher than both the 2000 and 2007 buying extremes. It is shy of the December 2020 record of $78.6 billion, but if foreigners flocked to U.S. stocks the way retail investors did in January, we may find that when the latest readings are released, foreign purchases will be at a new record.

One way to utilize the foreign buying (or, selling) indicator is with the Elliott wave model.

If you’re unfamiliar with Elliott wave analysis, or simply need a refresher on the subject, check out EWI’s FreePass for a Changed World event – thru March 31.

FreePass for a Changed World will give you an in-depth look at the analysis you can use to anticipate changes in inflation, interest rates and every other major category of investment concern.

Subscribers gladly pay $97 per month to get the market forecasts you’ll get for free in FreePass for a Changed World. But for FreePass, there’s no credit card required and zero strings attached.

Risks have changed. Opportunities have changed. The world has changed, in very real ways.

Join FreePass for a Changed World now and find out what your new strategies must include.

This article was syndicated by Elliott Wave International and was originally published under the headline Overseas Buyers Scoop Up U.S. Shares (Bullish or Bearish)?. 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.

Gold and Inflation Market Myth

Gold and Inflation: Here’s a Market Myth
“If you believe in Gold as a consumer price inflation hedge then…”

By Elliott Wave International

Back in the days of the Roman Empire, an ounce of gold could buy a Roman a well-made toga, belt, and finely crafted sandals.

In modern-day Rome, lo and behold, a businessman can become sharply dressed via the value of that same ounce of gold.

So, yes, gold has maintained its store of value over the centuries.

However, in the relatively short term — which can last years — gold may not be the inflation hedge that gold bugs believe it to be.

In a moment, I’ll show you how this relates to what’s going on with gold and inflation now. However, let’s first get insights from a chart and commentary from our February 2022 Global Market Perspective, which was published when inflation was really getting going (The monthly Global Market Perspective is an Elliott Wave International publication that covers 50-plus global financial markets):

The chart shows the U.S. dollar price of Gold versus the annualized rate of change in the U.S. Consumer Price Index (CPI). If you believe in Gold as a consumer price inflation hedge then, as the CPI is accelerating, the Gold price should be advancing. The green-shaded areas show that there have been five occasions since 1980 when the opposite was true, the last year being a good example. On the other side, the Gold-Inflation myth would allude to the price of Gold declining as CPI was decelerating. The grey-shaded areas show five occasions since 1970 when this was not the case, with 2007 to 2010 being a prime example.

Fast forward to today and we have these headlines:

  • US inflation eases grip on the economy, falling for a 6th month (AP News, Jan. 23)
  • Inflation in the U.S. could turn negative by midyear, says [this] billionaire investor … (MarketWatch, Jan. 28)

What’s happened to the price of gold? It’s steadily climbed in the face of easing inflation. Of course, this is just the opposite of what was occurring around this time last year. In both cases, the price of gold went in the opposite direction from what many would expect.

On Sept. 28, gold was trading at $1613.75 and has been in an overall uptrend since. The precious metal traded as high as $1949.46 on Jan. 26 (as of this writing on Jan. 30).

The bottom-line takeaway is that the widespread expected relationship between gold and inflation is not always there — indeed, there have been several instances in the past several decades where the opposite is the case.

Know that Elliott wave analysis, which is by no means a crystal ball, can nonetheless help you anticipate gold’s next big price move.

If you’re unfamiliar with Elliott wave analysis, read Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Learn about these “forms” for free as a Club EWI member.

That’s right — you can gain free access to the entire online version of this Wall Street classic by joining Club EWI — the world’s largest Elliott wave educational community. A Club EWI membership is also free, and members enjoy complimentary access to a wealth of Elliott wave resources on investing and trading.

Get started right away by following this link: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Gold and Inflation: Here’s a Market Myth. 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.

Stocks and Economy: Why 2022 May Have Just Been the Preview


“Fight the inertia that will keep you from taking action to prepare for the downturn”

By Elliott Wave International

The main show is likely about to begin.

2022 may have just been a preview of what’s ahead for stocks and the economy, which Robert Prechter’s Last Chance to Conquer the Crash warned about nearly a year ago, and our Global Market Perspective discussed at the start of 2022.

Let’s start with that warning from the January 7, 2022, Global Market Perspective, a monthly Elliott Wave International publication that covers 50-plus worldwide financial markets, via these charts and commentary:

The blue-chip Dow Industrials and S&P 500 … managed to eke out new highs in the first two trading days of 2022. There is a good chance that Wednesday’s trend reversal is the start of a long-term decline.

The “Wednesday” referenced was Jan. 5 and indeed, an all-time high for the Dow Industrials occurred on that very date, with the S&P 500 hitting its high on Jan. 4. Mind you, the Global Market Perspective‘s forecast was made in real-time — just two and three days, respectively, after those all-time highs registered.

As you know, the blue-chips have been in a downtrend since, albeit accompanied by some very sharp rallies — which is not unusual during downtrends.

Let’s now turn our attention to Robert Prechter’s Last Chance to Conquer the Crash, which, as a reminder, was published nearly a year ago and warned of a major economic contraction ahead. This is from the book:

Fight the inertia that will keep you from taking action to prepare for the downturn. Start taking steps now. … Think globally, not just domestically.

Yes, when the good times are rolling and stock market indexes are reaching new all-time highs, it can seem unnecessary to prepare for a downturn.

But, as you read these headlines, many people likely wished they had:

  • Household wealth down by $13.5 trillion in 2022, second-worst destruction on record (Marketwatch, Dec. 9)
  • Tech Layoffs in U.S. Send Foreign Workers Scrambling to Find New Jobs (The New York Times, Dec. 9)
  • Economists: A US housing recession has already arrived (The Hill, Dec. 7)
  • Defaults Loom as Poor Countries Face an Economic Storm (The New York Times, Dec. 3)
  • The UK economy is sliding into recession and Europe is set to follow (CNN, Nov. 11)
  • China’s super-rich see fortunes plunge as economy slows (The Guardian, Nov. 7)

There are many more similar headlines.

The stance of Elliott Wave International is that these headlines represent only an inkling of what’s likely ahead.

Keep in mind that the stock market leads and the economy follows. In other words, a downturn in the stock market is generally followed by a downturn in the economy and an upturn in the stock market is generally followed by improving economic conditions.

So, it would be a good idea to keep on top of the Elliott wave pattern of the stock market in which you are interested — whether it’s the U.S., another nation or many nations. Elliott wave analysis will help you to anticipate what’s next for a given stock market index or indexes. Hence, you can also anticipate what’s down the road for the economy. As you might imagine, Elliott wave analysis offers no guarantees, but it’s the best analysis of financial markets of which Elliott Wave International knows.

If you’re unfamiliar with Elliott wave analysis and would like to learn about it, read Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior — the definitive text on the Elliott wave model. Here’s a quote from the book:

The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the external causality to which one becomes accustomed in the everyday experiences of life. The path of prices is not a product of news. Nor is the market the cyclically rhythmic machine that some declare it to be. Its movement reflects a repetition of forms that is independent both of presumed causal events and of periodicity.

The market’s progression unfolds in waves. Waves are patterns of directional movement.

If you’d like to read the entire online version of this Wall Street classic, you may do so for free once you join Club EWI — the world’s largest Elliott wave educational community. A Club EWI membership is also free and allows you complimentary access to a wealth of Elliott wave resources on investing and trading.

Just follow this link: Elliott Wave Principle: Key to Market Behavior — get instant and free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Stocks and Economy: Why 2022 May Have Just Been the Preview. 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.

Investors in U.S. Treasuries Face Major Risk

Why Investors in U.S. Treasuries Face Major Risk
Rising rates will be “disastrous” for governments, other debtors and creditors

By Elliott Wave International

The market for U.S. Treasuries is the biggest bond market in the world, and it appears that potentially big trouble may be afoot.

Earlier this month, none other than the U.S. Treasury Secretary herself (Janet Yellen) acknowledged …

… “a loss of adequate liquidity in the [U.S. government debt] market.”

Then, in a statement last week, Bank of America strategists expressed concerns about …

… “large scale forced selling [of U.S. Treasuries].”

No wonder other analysts and traders have voiced worries about U.S. Treasuries being a potential key factor in the next financial crisis.

It may interest you to know that Elliott Wave International has been ahead of this developing story.

In April of this year, The Elliott Wave Theorist, a monthly publication which provides analysis of financial markets and major cultural trends, showed this amazing chart and said:

Because of the 39-year symmetry in this picture and the unprecedented arrival of negative interest rates, we have been adamant that interest rates bottomed in 2020. Sure enough, they have been rising since. … Rising interest rates will be disastrous for governments and other debtors as well as for creditors who hold long-term bonds.

Fast forward to the Oct. 21, 2022 U.S. Short Term Update, a thrice weekly Elliott Wave International publication that provides near-term analysis of major U.S. financial markets, which noted:

[U.S. Treasury long bond futures] are collapsing, as rates shoot higher. The yield on … 10-year treasury paper pushed to 4.34%, its highest level in 15 years. Bond investors are being absolutely crushed.

Of course, when bond yields rise, prices fall.

The question now is: Is the rise in yields almost over or do they have a lot further to go?

Well, an Oct. 21 Reuters article said:

Some investors believe Treasury yields are close to peaking. …

All financial markets have countertrend moves and it’s certainly possible that one is ahead for U.S. Treasuries.

Yet, what’s important to know is the main trend.

You can get a handle on the main trend of U.S. Treasuries by employing the Elliott wave model.

If you’re unfamiliar with Elliott wave analysis, or need a refresher, a great resource is Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4. The two interruptions are apparently a requisite for overall directional movement to occur.

[R.N.] Elliott noted three consistent aspects of the five-wave form. They are: Wave 2 never moves beyond the start of wave 1; wave 3 is never the shortest wave; wave 4 never enters the price territory of wave 1.

If you’d like to read more about the Elliott wave model, here’s some good news: You can access the online version of Elliott Wave Principle: Key to Market Behavior for free once you become a member of Club EWI, the world’s largest Elliott wave educational community.

Club EWI is free to join and members enjoy complimentary access to a wealth of Elliott wave resources on financial markets, investing and trading, including videos and articles from Elliott Wave International analysts.

Just follow this link to get started: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Why Investors in U.S. Treasuries Face Major Risk. 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.

Green Bonds

Wipeout! New Update on Our “Green Bond” (ESG) Forecast
Excessive euphoria in financial markets is usually a big reason to be “skeptical”

By Elliott Wave International

Environmental, Social and Governance bonds (ESG) — also called “green” bonds — are offered by companies which want to advance the causes of social justice, social inclusion and green technology.

This form of debt had been steadily gaining in popularity — going from sales of less than $100 billion in 2015 to around $800 billion in 2020.

For instance, here’s an Oct. 9, 2020 headline from Pensions & Investments:

University of Toronto’s $7 billion fund makes bet on ESG debt

However, the Elliott wave structure of a global green-bond index was sending a warning signal.

The July Global Market Perspective, a monthly Elliott Wave International publication which covers 50-plus worldwide financial markets, shows a chart from the December 2020 Global Market Perspective (on the left) and an updated chart on the right.

Focusing on the left chart first, which had sported a five-wave advance (meaning a trend turn was imminent), the December 2020 Global Market Perspective said:

Experts have loudly proclaimed that so-called social bonds will be the next great innovation. … But the euphoria surrounding this new debt is actually one of the biggest reasons to remain skeptical. … Steer clear of both green bonds and social bonds.

Indeed, as the updated right chart shows, the price began to fall shortly after that warning. Eventually, a countertrend rally ensued and by July 13, 2021, a Bloomberg headline said:

ESG Bond Sales Sprint to $1 Trillion as Investors Force Change

Once again, the Global Market Perspective provided a warning — this one from the August 2021 issue:

The wipeout could be one of the biggest ever.

You can see the big price tumble that occurred thereafter.

Do understand that the Elliott wave model does not guarantee that a financial market will behave in one fashion or another. At the same time, it’s the best analytical method of which Elliott Wave International knows because it’s based on the repetitive patterns of investor psychology.

Indeed, here’s what Frost & Prechter had to say in Elliott Wave Principle: Key to Market Behavior:

The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value. [emphasis added]

For a limited time, our friends at Elliott Wave International are offering you 5 quick takes on Elliott wave patterns in several markets — stocks, pot stocks and bonds — all from their new, July 2022 issue of the Global Market Perspective.

The publication provides analysis for 50+ of the world’s key markets.

See what warnings it’s issuing now.

FREE, check out 5 short excerpts from the new, July Global Market Perspective

This article was syndicated by Elliott Wave International and was originally published under the headline Wipeout! New Update on Our “Green Bond” (ESG) Forecast. 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.

Trading short vertical spread options for May

I want to start sharing my trading results each month on this blog. I started this method of trading/investing in the Spring of 2022 .. just a few months ago .. and am fine-tuning it as I go along. Lots of lessons learned the first month or two, but have been doing great the past few months.

The key was to create a method of using my money to make money that was low-stress and yet steadily made a good stream of income. I had tried dividend investing last year and it worked quite well … but I wanted my account to grow faster. So I took a chunk of money and opened an options trading account.

February and March were “learning months” and then April started the UP-trend nicely .. followed by a great May and June and July (so far).
SO –> I thought I would start sharing my trading results/details.
Starting May I had about $30,000 in the account and have profited over 10% each month. Nothing super exciting .. not a “get rich quick” scheme . . . but certainly the low-stress and steady stream of income. If continued, this will amount to a doubling of my money every year. I have a lucrative regular job so I do not need to touch this money until I “retire”. In five years it’ll be into the million$ .. then I can retire.

Anyway . . . here are my trades for May-2022 . . . I will continue to post each month’s results as I gather them together. Enjoy !!

right-click to download or open in new tab and zoom-in

my short vertical spread Trading for May-2022

Stock Market Recession Indicator

Here’s a More Reliable “Recession Indicator” Versus an Inverted Yield Curve
“The lead time between past inverted curves and economic contractions is widely variable”

By Elliott Wave International

Longer-dated bonds generally yield more than shorter-dated bonds to compensate an investor for assuming the greater risk of tying up money for a longer time.

As examples, 30-year government bonds have historically offered investors a higher yield than 10-year notes, and 10-year notes generally provide a higher yield than 2-year notes.

However, there are times when the yield on a shorter-term bond is higher than a longer-term bond. This is known as an inverted yield curve, and many market observers view this occurrence as a signal that a recession may be just around the corner.

For example, a March 28 CNBC headline said:

5-year and 30-year Treasury yields invert for the first time since 2006, fueling recession fears

The next day, on March 29 and then again on April 1, the yield on 2-year U.S. treasury notes climbed above the yield on 10-year U.S. treasury notes — prompting more potential recession talk. A key reason why is that a yield inversion has preceded every U.S. recession since at least 1955.

However, here are some important insights from our just-published April Elliott Wave Financial Forecast, a monthly publication which provides analysis of major U.S. financial markets:

The lead time between past inverted curves and economic contractions is widely variable … and usually does not occur until after the curve un-inverts. Since stock prices lead the economy, it is more reliable to monitor equities to estimate when the onset of an economic contraction may occur.

Indeed, here’s some historical evidence of that from Robert Prechter’s landmark book, The Socionomic Theory of Finance, which says:

It is important to understand that socionomic causality does not predict that each stock market decline will produce an official recession as defined by the National Bureau of Economic Research; it predicts that stock market declines and advances will reliably lead rather than follow whatever official recessions and recoveries do occur.

So, keep an eye on the stock market’s Elliott wave pattern for a clue about what’s ahead for the economy.

If you’re new to Elliott wave analysis, or simply need a refresher on the topic, you are encouraged to read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior.

Here’s a quote from the book:

In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. The patterns he discerned are repetitive in form but not necessarily in time or amplitude. Elliott isolated five such patterns, or “waves,” that recur in market price data. He named, defined and illustrated these patterns and their variations. He then described how they link together to form larger versions of themselves, how they in turn link to form the same patterns of the next larger size, and so on, producing a structured progression. He called this phenomenon The Wave Principle.

You may be interested in knowing that you can read the entire online version of Elliott Wave Principle: Key to Market Behavior for free.

You can get that free access by joining Club EWI, the world’s largest Elliott wave educational community.

Club EWI membership is free and allows you complimentary access to a wealth of Elliott wave educational resources on investing and trading without any obligation.

Just follow the link to get started: Elliott Wave Principle: Key to Market Behavior — free and unlimited access.

This article was syndicated by Elliott Wave International and was originally published under the headline Here’s a More Reliable “Recession Indicator” Versus an Inverted Yield Curve. 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.

Selling Vertical Option Spreads

Just letting you know that I will be posting here more often now. It has been a while since I was active on my board here. I have been spending time honing my trading system.

I am now a wise option seller . . for consistent, less stress, profits.

I am currently short various bearish, way out of the money, May and April SPY Call option Credit Spreads whose values are dwindling away into my brokerage account . . the profitable premiums I collected staying there.

I will start posting more here about my Trading System Methods.

Stock Market Financial Panic

Stock Market turn Down might be coming.

Why a Financial “Panic” May Be Just Around the Corner
Here’s why global investors should keep a close eye on “sight deposits”

By Elliott Wave International

Investors look to an array of indicators in hopes of determining what is next for the financial markets in which they are interested.

Some investors may focus entirely on “technical” indicators such as the Relative Strength Index (RSI), price levels of “support” or “resistance,” or say, advancing vs. declining issues, just to name a few. As you probably know, there are many more technical indicators.

Market participants also look at sentiment readings such as mutual fund cash levels, investors’ use of leverage, surveys and so on.

Yet, there’s at least one indicator that many global investors may overlook, and that’s the weekly change in “sight deposits” at the Swiss National Bank.

This chart and commentary from the September Global Market Perspective, an Elliott Wave International publication which offers coverage of 50+ worldwide financial markets, provide insight:

For the week ending August 6, commercial banks poured 1.2 billion francs into the Swiss National Bank, the largest weekly inflow since mid-June. The cash that banks park at the central bank are called “sight deposits,” and, together, the June and August data points represent the largest weekly inflows since the coronavirus panic in early 2020.

The previous spikes on the chart show why we keep such a close eye on sight deposits. Bank officials move cash into the SNB when fear swells, and they pull cash back out when complacency returns.

So, it does appear that fear is starting to develop among bankers.

As the September Global Market Perspective goes on to say:

With total sight deposits pushing to an all-time record of 713 billion francs last month, bank officials seem all too happy to park their money at the central bank. Perhaps they know something that the average meme stock investor doesn’t.

Elliott Wave International’s global analysts will continue to monitor sight deposits along with other indicators, plus, the Elliott wave structure of 50+ global financial markets.

Indeed, the September Global Market Perspective shows a chart with the Elliott wave patterns of two major global stock indexes. The chart’s headline is “The Alarm Bells Are Ringing.“

If you need to brush up on your knowledge of Elliott wave patterns, or you are new to Elliott wave analysis, you are encouraged to read the Wall Street classic: Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter.

Here’s a quote from the book:

In its broadest sense, the Wave Principle suggests the idea that the same law that shapes living creatures and galaxies is inherent in the spirit and activities of men en masse. Because the stock market is the most meticulously tabulated reflector of mass psychology in the world, its data produce an excellent recording of man’s social psychological states and trends. This record of the fluctuating self-evaluation of social man’s own productive enterprise makes manifest specific patterns of progress and regress. What the Wave Principle says is that mankind’s progress (of which the stock market is a popularly determined valuation) does not occur in a straight line, does not occur randomly, and does not occur cyclically. Rather, progress takes place in a “three steps forward, two steps back” fashion, a form that nature prefers.

If you’d like to read the entire online version of the book, you can do so by becoming a Club EWI member. Club EWI is the world’s largest Elliott wave educational community and is free to join. You are under no obligation as a Club EWI member. Yet, members do enjoy complimentary access to a wealth of useful Elliott wave resources on financial markets, investing and trading.

Join Club EWI and get free access to the book by following this link: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline Why a Financial “Panic” May Be Just Around the Corner. 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.

Everybody’s Getting Rich

“Everybody’s Getting Rich (and Having Fun) Except Me”
The idea of “missing out” on stock market gains “literally generates fear in many people”

By Elliott Wave International

Hardly anyone wants to miss the party — whether on Wall Street or elsewhere.

Thus, the acronym FOMO — which stands for the “fear of missing out” — is in vogue. After a 12-years long bull market, the acronym has appeared in many financial articles.

Yet, the acronym was coined years before the current bull market.

As the March 2019 Elliott Wave Financial Forecast, a monthly publication which provides analysis of major U.S. financial markets, noted:

The “fear of missing out” and its abbreviation were coined by Dr. Dan Herman. … It was first published in The Journal of Brand Management in 2000, coincident with the front edge of the Great Peaking Process. … After more than 200 years of rising stock prices, not being in the stock market literally generates fear in many people. The underlying cultural dynamic is also appropriate as it coincides perfectly with the long-term peak in social mood.

Social mood also governs attitudes and behaviors in society-at-large, including social life.

As a June 7 New York magazine article says:

The city runs on FOMO, a connoisseurship of opportunities and possibilities; the catechism of “Did you get invited, are you on the list, can you get a table?”; the performance of plans.

So, the “fear of missing” out on rising stock prices goes hand-in-hand with the “fear of missing out” on a fun social life. The desire to “see and be seen” and “live it up” is especially pronounced during times of an exceptionally positive social mood (think the Roaring ’20s).

So, social mood is all encompassing. And, returning to the financial aspects, here’s the latest on that front from Marketwatch (May 25):

[The] FOMO ETF [started] trading on the Cboe Options Exchange on [May 25], providing the market with a new tool for leveraging the retail trading boom by investing in all the buzziest “meme stocks” and funds from special-purpose acquisition corporations … to crypto-adjacent investments.

Right now, hardly anyone appears to be contemplating the total opposite of FOMO — which one of Elliott Wave International’s analysts said is the acronym FOBI. It stands for the “fear of being in.”

In other words, when social mood shifts from positive to negative (ushering in the next bear market), expect the “fear of being in” to replace the “fear of missing out.”

Remember, at the end of the 1920s, the stock market crashed. Social life — which had been characterized by vibrancy — was soon covered by a heavy blanket of gloom. The Wave Principle suggests that the next financial and social shift might be even more dramatic.

If you’d like to learn about the Wave Principle, you can do so by reading the online version of Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior for free.

Here’s a quote from the book:

It is a thrilling experience to pinpoint a turn, and the Wave Principle is the only approach that can occasionally provide the opportunity to do so.

The ability to identify such junctures is remarkable enough, but the Wave Principle is the only method of analysis that also provides guidelines for forecasting. Many of these guidelines are specific and can occasionally yield stunningly precise results.

All that’s required for free access to the book is a Club EWI membership — which is also free.

Club EWI is the world’s largest Elliott wave educational community (about 350,000 members and growing rapidly) and offers members free access to a wealth of Elliott wave resources on investing and trading.

Just follow this link to get started: Elliott Wave Principle: Key to Market Behavior — free and unlimited access.

This article was syndicated by Elliott Wave International and was originally published under the headline “Everybody’s Getting Rich (and Having Fun) Except Me”. 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.