"I Wouldn't Touch Bitcoin, Risk of Collapse Too Big"
Bitcoin's 50% crash was not entirely unexpected

By Elliott Wave International

"Wild" doesn't begin to describe Bitcoin's price action. This spring, it traded as low as $1200. Last week, BTC futures topped $20,000.

Yesterday (December 21), in an article by newsmax.com, Elliott Prechter warned about Bitcoin's future:

Elliott Prechter: I Wouldn't Touch Bitcoin, Risk of Collapse Too Big
Thursday, 21 Dec 2017 10:38 AM

"We provided the first financial publication in the world that discussed Bitcoin when it traded at 6 cents in 2010. Amidst obscurity, skepticism and disinterest, we explained the currency and said it had great potential," says Prechter.

Today, however, he says if you aren't already in the game when it comes to bitcoin, you might be better off sitting this one out.

"Bitcoin had great potential in 2010, but not in 2018. With today's elevated prices, manic psychology and weak fundamentals, I wouldn't touch it. The risk that it could collapse is too great."

Prechter says bitcoin could prove to be as fragile as a flower, or more specifically a tulip, comparing the bitcoin phenomena to the 1600s tulip mania in the Netherlands.

Then, the next day, Bitcoin crashed (just as Prechter had warned), reaching a low of $10,400 on cash exchanges.

When powerful new technologies emerge, they attract droves of investors. We saw it with the internet sector in the late 1990s. At the time, we described it as a bubble in the making.

Obviously the internet survived the bubble--and now thrives. But many investors' portfolios didn't.

We expect the same with Bitcoin. The blockchain technology that's behind it and other cryptocurrencies holds great potential. But unprepared investors, oblivious to the big picture, will see -- and have already seen -- their positions get run over.

That doesn't have to be you. You can be among the few prepared investors who understands what truly drives price swings in the crypto market.

We have two ways to help. The Theorist continues to cover the big-picture cryptocurrency trend -- and in fact, a Financial Forecast Service subscription, of which the Theorist is a part, will continue to show you exactly how the Bitcoin bubble is a preview of the still-larger financial markets mania.

And for speculators who dare to dip their toe in these fast-moving waters, we've just launched Cryptocurrency Pro Service. It delivers daily and intraday Bitcoin forecasts, with plans to add more cryptos soon. Learn more about Cryptocurrency Pro Service.

One thing's for sure. When there's this much volatility in a market, the opportunities -- and risks -- are huge. More than ever before, you need to know what the Elliott waves are saying.

Whatever your level of interest in Bitcoin and cryptos, we've got you covered.

This article was syndicated by Elliott Wave International and was originally published under the headline I Wouldn't Touch Bitcoin, Risk of Collapse Too Big. 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.

Bitcoin: Here's Why the Push Above $20,000 Was in the Cards

By Elliott Wave International

Now You Can Get Bitcoin Updates Daily and Even During the Day -- and Get in Front of the Waves EWI's FX analysts now provide cryptocurrency coverage. Now, investors who follow and trade Bitcoin can see what is most likely to happen next -- on multiple degrees and in both directions. And the CME and CBOE just launched Bitcoin futures, so you can participate on stable exchanges. To our best knowledge, The Elliott Wave Theorist was the first financial publication in the world to discuss Bitcoin. Bitcoin began in 2009. When it hit 6 cents in September 2010, amidst obscurity, skepticism and disinterest, our Theorist explained the digital currency to subscribers and said it had the potential to become the world's currency. As everyone now knows, Bitcoin recently traded at $20,000. The majority of traders get run over by big, unanticipated market swings. Those who follow Elliott waves can be calm, prepared and ready to take action before the next, most likely turn. 4 ways EWI's Cryptocurrency Pro Service lets you make decisions with more confidence You Get Analysis Through the Day Your Cryptocurrency Pro Service subscription puts a team of Forex experts in your corner. Their goal is to make sure that day-by-day, you have the latest Elliott wave coverage for Bitcoin. To start, we will provide Bitcoin coverage several times a day. As demand proves out, we'll increase our frequency. If other cryptocoin futures become available, we'll cover them. You Get "Opportunity-Now!" Alerts on Currency Pairs As a Cryptocurrency Pro Service subscriber, you also get opportunity alerts in currencies. Your Pro Services Forex team scours all FX markets for dramatic setups for you. That's when a market has reached a low-risk, high-reward juncture in its wave pattern. You'll find the alerts in the Opportunities section of your Pro Services portal. You Get Essential Weekly Perspective On Currencies Once a week, your currency analysts prepare a video to help you prepare for the week ahead. Sit back and watch as our analysts reveal the markets that are on their radar and should be on yours -- including Bitcoin. Then, each day, market veteran Murray Gunn posts his Currency Insights column. The inimitable analyst calls your attention to an overlooked but powerful wave-generated undercurrent moving FX. These videos and columns are required viewing and reading for all serious currency followers. You Become Part of an Exclusive Community of Savvy Elliott Wave Traders If you have a question about the Wave Principle or our analysis, just send us an email. An FX team member will get back to you. We know that we're successful when you are successful. We do what we can to make sure that happens. Special Introductory Offer: We considered waiting to launch our Cryptocurrency Pro Service until January 1. That would let us iron out every kink, including data access and format. Instead, we decided to give you the choice: Order now and get 2 months of our new Crypto Pro Service for the price of 1, or wait until January 1 and pay the normal rate. It's your call. Start Your Subscription Now for $49 This offer is good until 12 midnight, Eastern time, on December 31, 2017. Starting January 1, we go to full price.

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin: Here's Why the Push Above $20,000 Was in the Cards. 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.

A Method Traders Can Use to Confirm an Elliott Wave Count

By Elliott Wave International

When you are watching a pattern develop on a chart, how can you be sure that your Elliott wave count is correct? Elliott Wave International's Senior Analyst Jeffrey Kennedy spent years designing his own technique to improve his accuracy. He came up with the Kennedy Channeling Technique, which he uses to confirm his wave counts. The following excerpt from Jeffrey's Trader's Classroom lessons offers an overview of his method. Get more trading lessons from Jeffrey in his popular free eBook, The Best of Trader's Classroom.

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My theory is simple: Five waves break down into three channels, and three waves need only one. The price movement in and out of these channels confirms each Elliott wave.
Base Channel
Figure 61 shows three separate five-wave patterns with three different channels drawn: the base channel, the acceleration channel and the deceleration channel.

The base channel contains the origin of wave 1, the end of wave 2 and the extreme of wave 1 (Figure 61A) [waves 1 and 2 connect with a line, then draw a parallel line along the top of wave 1]. Of the three channels, the base channel is most important, because it defines the trend. As long as prices stay within the base channel, we can safely consider the price action corrective. Over the years, I've discovered that most corrective wave patterns stay within one price channel (Figure 62). Only after prices have moved through the upper or lower boundary lines of this channel is an impulsive wave count suitable, which brings us to the acceleration channel.
Acceleration Channel
The acceleration channel encompasses wave 3. Use the extreme of wave 1, the most recent high and the bottom of wave 2 to draw this channel (Figure 61B) [draw the line from the top of wave 1 to the top of wave 3, then draw a parallel line starting at the bottom of wave 2]. As wave three develops, you'll need to redraw the acceleration channel to accommodate new highs.
Once prices break through the lower boundary line of the acceleration channel, we have confirmation that wave 3 is over and that wave 4 is unfolding. I have noticed that wave 4 will often end near the upper boundary line of the base channel or moderately within the parallel lines. If prices break through the lower boundary line of the base channel decisively, it means the trend is down, and you need to draw new channels.

Deceleration Channel
The deceleration channel contains wave 4 (Figure 61C). To draw the deceleration channel, simply connect the extremes of wave 3 and wave B with a trend line. Take a parallel of this line, and place it on the extreme of wave A. As I mentioned before, price action that stays within one price channel is often corrective. When prices break through the upper boundary line of this channel, you can expect a 5th-wave rally next.
In a nutshell, prices need to break out of the base channel to confirm the trend. Movement out of the acceleration channel confirms that wave 4 is in force, and penetration of the deceleration channel lines signals that wave 5 is under way.
[Elliott wave patterns are fractal, meaning they occur on small and large scales. Therefore, it is also possible this entire pattern could all occur within a much bigger trend channel.]

14 Critical Lessons Every Trader Should Know Since 1999, Jeffrey Kennedy has produced dozens of Trader's Classroom lessons exclusively for his subscribers. Now you can get "the best of the best" in these 14 lessons that offer the most critical information every trader should know. Find out why traders fail, the three phases of a trader's education, and how to make yourself a better trader with lessons on the Wave Principle, bar patterns, Fibonacci sequences, and more! Don't miss your chance to improve your trading. Download your FREE 45-page eBook today!

Our Forecast BEFORE the 47 Percent, 12-Month Gain

By Elliott Wave International

Learn How to Apply the Wave Principle to Improve Your Trading and Investing No matter what markets you follow, this 10-lesson tutorial will help you begin applying Elliott waves so you can find opportunities like this one in EEMA. You'll learn: What the basic Elliott wave progression looks like Difference between impulsive and corrective waves How to estimate the length of waves How Fibonacci numbers fit into wave analysis Practical application tips for the method Get instant access!

This article was syndicated by Elliott Wave International and was originally published under the headline Our Forecast BEFORE the 47 Percent, 12-Month Gain. 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.

Bull/Bear Ratio: Is "More Leverage" Better?

By Elliott Wave International

Learn to Use Sentiment to Time Your Investments Better In this 14-minute video, you'll learn how to combine Elliott wave analysis with extremes in market sentiment to reliably anticipate turning points in the markets. EWI Chief Market Analyst Steve Hochberg explains using an example in gold. Get instant access!

This article was syndicated by Elliott Wave International and was originally published under the headline Bull/Bear Ratio: Is "More Leverage" Better?. 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.

The Loonie Takes Flight -- BUT a "Labor Miracle" is NOT the Reason Why

One day before the jobs numbers went viral, Elliott wave analysis already called for a USDCAD decline

By Elliott Wave International

Friday December 1 was a lucky break for loonie bulls. That day, the government agency Statistics Canada revealed the nation's economy added 79,500 new jobs in November, "blowing past" the 10,000 that economists expected. As one major news source described it:

"Canadian dollar posted its biggest gain in nearly three months against its U.S. counterpart on Friday after a stronger-than-expected domestic jobs data fueled expectations for further Bank of Canada interest rate hikes early next year..."

"The labor miracle in Canada continues." (Dec. 1 Reuters)

Absolutely, a jobs number that's EIGHT times bigger than expected is a significant event for economists; some would even call it "miraculous." But here's the part we have trouble with: The spike was NOT the cause for the Canadian dollar's surge.
The reason we know that is because Elliott wave analysis foresaw a loonie rally before the jobs "miracle" was released.
On November 30, a day before the surprise numbers went viral and stirred up a media frenzy, our Currency Pro Service editor Jim Martens set the stage for a decline in the USDCAD: (a falling U.S. dollar/rising Canadian dollar)
Here is Jim's analysis from his November 30 Currency Pro Service intraday update:
November 30 2:30 PM:

"USDCAD pushed to a new high on the day. Despite the new high the rally from 1.2672 might still represent wave b of a larger flat correction. A double top with 1.2915 would best serve the flat scenario. It would lead to a wave c decline that reaches below 1.2666. -- Jim"

Jim also referenced the upcoming jobs data report:

"Unemployment Claims is the next high impact economic release due out in the U.S. at 8:30 AM ET [Friday morning]."

Obviously, Jim had no way of knowing that the jobs claims would outperform expectations eight-fold. His analysis wasn't based on the "fundamental" data, but rather on the Elliott wave pattern unfolding on the USDCAD's price chart.
The next chart shows you how the currency pair followed its Elliott wave script to a T, with the greenback plunging and the loonie rising.

What makes forecasts like these possible is the fact that Elliott wave analysis tracks and forecasts market psychology. It's the collective psychology of market players that create trends.
The loonie was poised to strengthen against the dollar regardless of what the labor report had said; there didn't have to be any CAD-bullish news, period.

Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success Learn how to put the power of the Wave Principle to work in your forex trading with this free, 14-page eBook. EWI Senior Currency Strategist Jim Martens shares actionable trading lessons and tips to help you find the best opportunities in the FX markets you trade. Get Immediate Access!

This article was syndicated by Elliott Wave International and was originally published under the headline The Loonie Takes Flight -- BUT a "Labor Miracle" is NOT the Reason Why. 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.

An "Unprestigious" Preview of Debt Deflation

By Elliott Wave International

Evidence: Your Bond Fund Is Riskier Than You Think Debt deflation has taken down a huge multinational builder. Pitfalls in the bond market are growing too risky for bond investors to ignore. Learn what you need to know in a free, new report from EWI's Murray Gunn -- "Your Bond Fund: It's Riskier Than You Think." Learn more and register for free!

This article was syndicated by Elliott Wave International and was originally published under the headline An "Unprestigious" Preview of Debt Deflation. 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.

How to Forecast the Stock Market… from a Desert Island

"Sometimes a [price] pattern will clear up on a particular day and you must act…"

By Elliott Wave International

FREE Online Tutorial from Elliott Wave International 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! Get 10 FREE Lessons on The Elliott Wave Principle that Will Change the Way You Invest Forever

This article was syndicated by Elliott Wave International and was originally published under the headline How to Forecast the Stock Market… from a Desert Island. 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.

Are All Bonds EQUALLY Low Risk?

By Elliott Wave International

Your Bond Fund: It's Riskier Than You Think Quantitative Easing (QE) changed the bond markets in ways many don't realize. And now that QE is unwinding, investing in bonds comes with pitfalls that are too risky to overlook. This new resource from EWI's Murray Gunn offers insights you don't want to miss. Get your free report, Your Bond Fund: It's Riskier Than You Think. Learn more and register for free!

This article was syndicated by Elliott Wave International and was originally published under the headline Are All Bonds EQUALLY Low 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.

Some Traders Hit. Some Traders Miss. Here's How to be Part of the 1st Group

Also, watch Jeffrey Kennedy identify two high-confidence trade set-ups in Johnson & Johnson (NYSE: JNJ)

By Elliott Wave International

'It's the most wonderful time of the year,' goes the famous holiday song. Except on Black Friday morning, that is, when a deadly stampede of shoppers at the big-name box store runs Granny down in the dry goods aisle.
But, if you think about it, a Black Friday stampede is not that different from a trading 'stampede' when thousands of trades all rush into the same hot stock.
When the trading "doors" open and a throng of people are all angling for the same opportunity as you, the clock is ticking. Under pressure, many traders race headlong into that market, palms sweating, heart racing, with no secure trading plan in place.
Have you ever been part of that crowd? That's OK. All traders have.
Our very own master analyst Jeffrey Kennedy describes this tendency in his newest educational resource '12 Real Life Techniques That Will Make You a Better Trader Now.' It's a collection of 5 video tutorials, and in the third one Jeffrey nails the 'stampede' impulse on the head:

"The reason is because people are running on a 'lack' mentality. Everybody's knocking each other down, fighting to get to the front of the pack because again, they're thinking there's a limited supply of whatever items, say flat-screen TV's.
Well, ever since they made flat-screen TV's, I don't think there has ever, in reality, been a single day that I couldn't go out and buy whatever flat-screen TV I've wanted. I could buy five a week if I wanted to because the supply is out there.
Likewise, there's plenty of opportunity in the markets. Literally, there is more opportunity than you actually have money in your trading account. By understanding that, you begin to discard the 'lack' mentality, and embrace an abundant one."

That's 1 lesson of 12: "Wait for the market to commit to you before you commit to the market" because no matter what, there is always another opportunity waiting just around the corner.
It helps, of course, to know exactly what you're waiting for. In the second video of this five-video series, Jeffrey catalogs the "four critical elements of a high-confidence trade set-up," using the price chart of Johnson & Johnson stock (NYSE: JNJ)
JNJ Opportunity #1: December 29, 2016 Trader's Classroom lesson. There, Jeffrey identified recent selling as a corrective fourth wave and called for the resumption of the larger uptrend in a fifth wave rally "above $124.38."
JNJ Opportunity #2: May 2, 2017 Trader's Classroom video lesson, where Jeffrey showed subscribers how, if they missed the big JNJ rally from December, there was another "opportunity to the buy side" -- one that would take prices to $132, or even $137.
The chart below shows how Jeffrey's objective criteria kept his subscribers one step ahead of two major opportunities in this popular stock:

Want to watch Jeffrey's actual video forecast where he analyses JNJ in real-time?
Press play and enjoy!

Some traders hit. Others, miss. Learn to be part of the first group today with Jeffrey's five-video educational resource, "12 Real Life Techniques That Will Make You a Better Trader Now."
Let our own Master Instructor Jeffrey Kennedy share with you 5 videos with 12 battle-tested trading tips. These free lessons will make you understand the steps you should always take to capitalize on new market opportunities.

Get Access Now!

This article was syndicated by Elliott Wave International and was originally published under the headline Some Traders Hit. Some Traders Miss. Here's How to be Part of the 1st Group. 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.

Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up

See how two technical indicators, RSI and ZLR, helped anticipate the resumption of FB's uptrend -- back in May

By Elliott Wave International

Some days, the fundamental backdrop of the markets you follow is as peaceful and quiet as a Zen garden. The news cycle is calm and the mainstream predictions about price are clear.
Other days, though, that backdrop is as chaotic as the Jersey turnpike during rush hour; jackhammers of breaking news pound in your ears while the "horns" of prognostication honk in opposite directions.
Wednesday, November 1 was a turnpike kind of day for the likes of Facebook, as market followers braved a media maelstrom over the tech giant's testimony on Capitol Hill, one of three social networks accused of providing a broad, public forum for Russia to influence the 2016 U.S. presidential election via strategically divisive Facebook ads and posts.
In the wake of the House & Senate Intelligence Committee hearing, Facebook analysts were all over the map on how the investigation and criticism will affect the tech giant's stock moving forward. Here, these news items from November 1 and 2 capture the conflicting outlooks:

Facebook is invincible: "Facebook Shatters Earnings... show[ing] just how insulated its business remains from political risks." (Fortune)

Facebook is vulnerable: "Facebook shares fell as much as 2% after it said on a conference call that 2018 expenses would rise 45% to 60%... for more security." (CNBC)

Facebook is invincible: "If you haven't bought Facebook Inc, What are you Waiting for?" (Investorplace.com)

Facebook is vulnerable: "Facebook Inc (FB) Warns Drop in Profits As it Ramps Up Security" (Value Walk)

Not to get too meta here, but if Facebook traders had their own Facebook page, this news-driven uncertainty would illicit a big, fat Facebook thumbs down.
So, what's the alternative? When you have a company as hugely popular as Facebook, stopping the news cycle from churning out gossip, hearsay, rumbles and rumors is impossible.
That's true. You can't stop the news. But you can stop yourself from being distracted by it.
See, for our Trader's Classroom instructor Jeffrey Kennedy, the one way to objectively gauge price trends is with technical analysis. It's an airtight, noise-controlled assessment of market action that shuts out fundamentals and focuses strictly on the "mathematics" of price patterns.
Take Facebook. Six months ago, in his May 30 Trader's Classroom, Jeffrey praised the "versatility" of technical analysis; namely, how it works on every liquid market, virtually every timeframe, and for every type of trader from day scalper to long-term campaigner. In his video lesson, Jeffrey tracked the progress of three main indicators -- the Relative Strength Index (RSI) "phase change," Elliott wave analysis, and the MACD Zero Line Reversal (ZLR) -- all of which pointed to the resumption of Facebook's uptrend.
From there, Facebook shares broke out of their months-long sideways trend and took to the upside. Then, in his August 22 Trader's Classroom, Jeffrey returned to the ZLR on Facebook's price chart and showed how this simple indicator confirmed the tech stock's rally was well on its way to setting new highs above 175.
The following chart of Facebook shows exactly when and where Jeffrey's Trader's Classroom episodes aired within the market's powerful rally.

We eagerly invite you to listen to an exclusive compilation of the May 30 and August 22 Trader's Classroom webisodes to hear Jeffrey walk traders through his "buy-side oriented" analysis of Facebook in real-time:

Free Trader's Workshop: "Battle-Tested Tools to Boost Your Trading Confidence" Get 7 free lessons that will give you the tools you need to confidently identify trading opportunities in the charts you follow every day. Register now and get your first 6 lessons instantly. Then, on Monday, Nov. 20, join Jeffrey Kennedy for a live webinar where he will show you how to apply these techniques to live charts of some of today's most popular stocks, like Facebook, Amazon and Netflix. Register Now!

This article was syndicated by Elliott Wave International and was originally published under the headline Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up. 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.

What "Too Confident to Save" Means for Stocks

By Elliott Wave International

Learn to Use Sentiment to Time Your Investments Better In this 14-minute video, you'll learn how to combine Elliott wave analysis with extremes in market sentiment to reliably anticipate turning points in the markets. EWI Chief Market Analyst Steve Hochberg explains using an example in gold. Get instant access!

This article was syndicated by Elliott Wave International and was originally published under the headline What "Too Confident to Save" Means for Stocks. 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.

E-franc, E-krona...E-volution?

By Murray Gunn, Elliott Wave International

With all the speculation around the future of Bitcoin and other cryptocurrencies, we thought you'd find this interesting.

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Dam Square, Amsterdam 1636. Rue de Quincampoix, Paris 1719. 'Change Alley, London 1720. Is Zug, Switzerland 2017 about to be added to this roll call of bubble epicenters?
The sleepy town of Zug, nestled amidst beautiful countryside, is the unlikely host of what has become known as Crypto Valley as crypto currency ventures flock to set-up business there, lured by low taxes and light regulation. The Swiss, it would appear, are at the forefront of a potentially radical change in global currency markets. As an article from CityWire states - "Known for its innovative spirit, Switzerland's financial industry has been ahead of the curve in developing blockchain and cryptocurrencies."
The Swiss National Bank are said to be seriously considering an e-franc, a cryptocurrency using the blockchain technology. Sweden, where, to be fair, the world's first central bank was created in the 1600s, is also said to be quite far down the line of development. The CME has announced that it is to start a Bitcoin future. Is crypto-mania the biggest bubble in history, or an epochal change for money and FX markets? It might be both.
Elliott Prechter was among the very first to note the potential for Bitcoin, both to turn into a bubble and for its disruptive potential. As he alluded to in his most recent paper, crypto-mania is almost undoubtedly a bubble but, after the inevitable crash, whichever currency is left standing may well change the way the world works.
How will FX trading evolve? Perhaps it will disappear altogether. After all, if there is just one world currency, there would be no need for exchange. Perhaps there will be national crypto currencies, which undoubtedly defeats the objective. Perhaps crypto currencies aren't currencies at all, but actually speculative assets with zero intrinsic value. At this stage, I, for one, don't mind admitting that I have no idea how the crypto technology will affect FX and money-markets. As Alan Watts so serenely put it, "The only way to make sense out of change is to plunge into it, move with it, and join the dance." That, I hasten to add, is most definitely not an endorsement of doing any trading in the crypto space.
I will leave you with a chart to ponder. Did you know that you can buy shares in a central bank? Yes, the Swiss National Bank shares are freely traded. The chart below shows you what they have done over the last couple of years, alongside the price of Bitcoin. Is it just me, or is anyone else intrigued with what is going on in Switzerland?

Get more insights from Murray -- free -- when you join in our Forex FreeWeek (Nov. 8-15). You'll also get intraday and daily forecasts for EURUSD, GBPUSD, USDJPY, AUDUSD, EURJPY and more. BONUS -- FreeWeekers also get this ebook: How the Elliott Wave Principle Can Boost Your Forex Success Learn more and get in on FreeWeek now.

This article was syndicated by Elliott Wave International and was originally published under the headline E-franc, E-krona...E-volution?. 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 Forex with Elliott Doesn't Have to be Complicated

Watch a simple lesson on Elliott waves from Chief Currency Strategist Jim Martens

By Elliott Wave International

Understanding the Wave principle doesn't have to be hard. In fact, as you'll see in this 5-minute clip, learning from EWI's Chief Currency Strategist Jim Martens can be downright entertaining.
Watch as the 30-year veteran analyst explains how learning to use Elliott waves can be as simple as counting to 5 and knowing your A-B-Cs!
While it's true that forex trading can be complex, Jim Martens uses the Wave Principle's rules and guidelines to make it easier.

Forex FreeWeek is Here! Nov. 8-15 Get unrestricted access to our Currency Pro Service. 11 Top FX Markets. 24-Hour-a-Day Forecasts. Yours Free for 1 Week! BONUS -- FreeWeekers also get this ebook: How the Elliott Wave Principle Can Boost Your Forex Success Get instant access!

This article was syndicated by Elliott Wave International and was originally published under the headline Trading Forex with Elliott Doesn't Have to be Complicated. 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.

Want to Be a Trader? Start by Mastering Elliott Waves -- Here's Why

A few tips from someone who's lived financial markets for almost 25 years

By Elliott Wave International

In this new interview with Jeffrey Kennedy, the editor of our Commodity Junctures & Trader's Classroom services, he offers a few trading tips for those who are newer to the Wave Principle and explains how Elliott wave analysis helps you master ALL forms of technical analysis.

New Trader Resource: 12 Real-Life Techniques that Will Make You a Better Trader Now Over 5 free videos, Master Instructor Jeffrey Kennedy gives you 12 battle-tested trading tips -- 100% free. These free lessons will help you understand the steps you should always take to capitalize on new market opportunities. Start watching now, free!

This article was syndicated by Elliott Wave International and was originally published under the headline Want to Be a Trader? Start by Mastering Elliott Waves -- Here's Why. 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.

From "1:5 to 5:1 in 35 Years" - The Long March AWAY from Safety

By Elliott Wave International

When market psychology finally turns, it will turn HARD. You can be ready: See what the market's Elliott wave picture can do for you -- today. 3 Videos + 8 Charts = Opportunities You Need to See. Join this free event hosted by Elliott Wave International and you'll get a clear picture of what's next in a variety of U.S. markets. After seeing these videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won't get anywhere else. Get your FREE report now – for a limited time!

This article was syndicated by Elliott Wave International and was originally published under the headline From "1:5 to 5:1 in 35 Years" - The Long March AWAY from Safety. 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.

Here’s Why Stocks and Home Runs Are at All-Time Highs

By Alan Hall, senior analyst at the Socionomics Institute

Preview

Here’s Why Stocks and Home Runs Are at All-Time Highs

By Alan Hall, senior analyst at the Socionomics Institute

This article was originally published on CNBC under the headline "Home Runs and Strikeouts Can Track the Stock Market."
________________________________________
Why in the world would Major League Baseball home run statistics track the U.S. stock market?
It's tempting to dismiss such a finding as a wild coincidence or a fluke, but as you can see in the chart, the relationship between the two has persisted for nearly 150 years. What's more, it gets even stronger if you add strikeouts into the mix. Most hitters and pitchers don't check stock tickers before swinging and flinging, and most stock investors don't check baseball stats before buying and selling. So what's the connection? The simplest explanation is that society's overall mood influences performance in both arenas.
For example, on Friday, June 2 of this year, the Dow Jones Industrial Average set a new all-time high for the first time in three months. The next day, confidence wafted on the breeze, along with the aromas of hot dogs and popcorn, as Seattle Mariners catcher Mike Zunino stepped up to the plate and gracefully swatted a "mammoth" grand slam. Zunino later told the Associated Press: "It's just nice to step in the box and feel like you can hit."

Feeling "like you can hit" was "l'esprit du jour" in ballparks that Saturday. Six other MLB players also belted grand slams. Zunino's was the seventh, a new single-day record. "It's officially the grandest day in Major League Baseball history," wrote MLB.com.
That record-setting Saturday was part of a record-setting month in a record-setting year for Major League Baseball, mirroring the Dow Jones Industrial Average's record-setting streak to numerous all-time highs. In June, players hit more home runs than in any previous month in history. And on September 19, hitters broke the record for home runs hit in a single season.
The previous single-day grand slam and single-month home run records were set in May 2000, the year of the previous record high for single-season home runs -- and a year in which the stock market also set an all-time high.
Home runs weren't the only records set in baseball this year. Pitchers also threw more "immaculate innings" (striking out a side on nine consecutive pitches) than ever before. The New Yorker wrote, "it's true that the increased tendency to swing for home runs comes with an additional likelihood that one will miss: Strikeouts have also spiked to record rates."
Our chart plots 147 years of social mood as reflected by a PPI-adjusted index of U.S. stocks versus two indicators of baseball performance. The bottom line plots average home runs per MLB game. Homers have trended roughly parallel to the Dow/PPI, but the relationship is not perfect. Notable divergences surround some of the major peaks and troughs.
The middle line in the chart plots average home runs plus strikeouts per game, a new baseball metric which I dubbed the "Swing for the Fences" indicator, or SWAT -- not an exact acronym, but it's catchy and close enough. This performance index has had an even tighter relationship with the Dow/PPI, especially since the 1940s. Today, stocks, SWAT and average home runs per game are at new all-time highs.
Just as the fever for investing peaks and subsides, so do fans' attitudes toward baseball. Sports Illustrated and others have recently argued that the current deluge of home runs and strikeouts is a problem because it makes for a longer, boring game. One can almost hear the passion fading and the psychology shifting.
Robert Prechter's socionomic theory sees stock market indexes as more than just financial indicators. They are also indicators of changes in society's optimism and pessimism, our social mood. Positive mood produces optimism, confidence and stock market advances. Negative mood produces pessimism, fear and stock market declines. The same seems to be true for baseball performance.
Sabermetrics has come a long way in the past four decades, but stats that measure batter confidence and psychology have remained elusive. Perhaps part of the answer has been right under our noses, in the ups and downs of the stock market.

You Can Get Ahead of Fast-Moving News with The Thinking Person's Membership Imagine scrolling through the latest news stories, nodding and saying, "THAT makes sense." And "THAT is right on time." That is what Socionomics Members get every month. The same events that disrupt most people are confirmation to them. You can join them. Learn more about the Socionomics Membership

This article was originally published on CNBC under the headline Home Runs and Strikeouts Can Track the Stock Market.

U.S. Stocks: A Sentiment Extreme You MUST Pay Attention to

Here's what it's telling you about this bull market

By Elliott Wave International

Robert Kelley, the editor of our US Stocks Intraday Pro Service, tells you about a sentiment extreme that he's seen recently. Watch this new interview to find out what has caught his attention and what they mean for U.S. stocks going forward.

Learn to Use Sentiment to Time Your Investments Better In this 14-minute video, you'll learn how to combine Elliott wave analysis with extremes in market sentiment to reliably anticipate turning points in the markets. EWI Chief Market Analyst Steve Hochberg explains using an example in gold. Get instant access

This article was syndicated by Elliott Wave International and was originally published under the headline U.S. Stocks: A Sentiment Extreme You MUST Pay Attention to. 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.

Stock Market Optimism Approaches Days of Roman Empire

Investors are placing a stock market bet of record degree

By Elliott Wave International

If there's ever been a time to resist the impulse to follow the investing crowd, now is that time. Large speculators are making a bet that's four times larger than what they made in January 2008. Take a look at this chart.

Learn to Use Extremes in Optimism to Time Your Investments Better In this 14-minute video, you'll learn how to combine Elliott wave analysis with extremes in market sentiment to reliably anticipate turning points in the markets. EWI Chief Market Analyst Steve Hochberg explains using an example in gold. Get instant access

This article was syndicated by Elliott Wave International and was originally published under the headline Stock Market Optimism Approaches Days of Roman Empire. 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.

"Buy and Hold" ... and Investing is Easy

By Elliott Wave International

3 Videos + 8 Charts = Opportunities You Need to See. Join this free event hosted by Elliott Wave International and you'll get a clear picture of what's next in a variety of U.S. markets. After seeing these videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won't get anywhere else. Get your FREE report now – for a limited time!

This article was syndicated by Elliott Wave International and was originally published under the headline "Buy and Hold" ... and Investing is Easy. 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.

How to Tell the "Size of the Forming Top" in U.S. Stocks

Why these "trivial" indicators are actually historic red flags

By Elliott Wave International

Many investors see almost no risk in the stock market. Indeed, they are betting to a record degree that the stock market will continue to rise. In EWI's view, here's what this extreme financial optimism strongly suggests.

Learn to Use Sentiment to Time Your Investments Better In this 14-minute video, you'll learn how to combine Elliott wave analysis with extremes in market sentiment to reliably anticipate turning points in the markets. EWI Chief Market Analyst Steve Hochberg explains using an example in gold. Get instant access

This article was syndicated by Elliott Wave International and was originally published under the headline How to Tell the "Size of the Forming Top" in U.S. Stocks. 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 Basics Series: The Quantity Theory of Money

By Elliott Wave International

Here's our challenge.
In order to be aware of the investment pitfalls and opportunities that deflation can bring, we must first understand the basic elements of why it occurs. So our challenge is to try and make monetary economics, a subject that most people would find duller than watching paint dry on a wall, understandable and, dare I say it, fun! It's a big ask but we like a test, and so here is the first in our Deflation Basics Series -- The Quantity Theory of Money.
The Quantity Theory of Money (QTM for short) is the very essence of the true definition of inflation and deflation. You see, most people think of inflation and deflation as the rise and fall or prices when it is actually all about the rise and fall of the quantity of money.
The QTM has its origins in the 16th century and the writings of the Prussian polymath Nicolaus Copernicus as well as followers of the School of Salamanca such as Martín de Azpilcueta. As European nations looted the Americas for gold and silver, an increase in the price of goods in general was noted as the metals were brought back to the Old World. This observation, via the writings of, among others, John Locke, David Hume, John Stuart Mill and Ludwig von Mises, led to a link between the quantity of money in an economy and the level of the price of goods.
QTM is the cornerstone of monetarist economics which was largely developed by Milton Friedman, gaining popularity during the 1970s. Put simply, the Quantity Theory of Money can be expressed as the "Equation of Exchange":

In plain speak, the amount of money in an economy multiplied by the number of times that money is used, equals the price of stuff bought multiplied by the amount of stuff bought.
Let's take a simple example.
If an economy has $1,000 in total and that money is turned over 3 times during a month, total spending equals $3,000 that month. If the amount of stuff bought was 100 items, then the average price of each item would be $3,000 divided by 100 which equals $30.

We can re-arrange the Equation of Exchange to solve for the price level, P:

Therefore, in our economy:

Now let's assume that, the next month, money supply increases from $1,000 to $2,000, with the velocity of money and the amount of stuff bought staying the same. What would be the effect on the average price level?


The average price level has gone up from $30 to $60. The average price of goods has gone up due to the inflation of the money supply.
The next month, the money supply decreases from $2,000 to $500, with the velocity of money and the amount of stuff bought staying the same. What would be the effect on the average price level now?


The average price level has gone down from $60 to $15. The average price of goods has gone down due to the deflation of the money supply.
This basic example shows the relationship between the level of the money supply in an economy and the average level of prices. The catch comes, of course, with the old economics chestnut, the Latin phrase ceteris paribus (all other things being equal). In the ivory towers of academic economics all other things can remain equal, but in the real world, they don't.
So our assumptions in the example above that the velocity of money remained at 3 and that the amount of stuff bought remained at 100 would have to be challenged. In fact, one of the main criticisms of the QTM is that the velocity of money does not remain constant and changes due to the vagaries of spending impulses. However, if money supply didn't change but the velocity of money went down instead, the effect is the same -- lower prices (assuming the amount of stuff bought remained the same that is!).
Monetarists in the 1980s thought that, by targeting money supply growth, the level of goods and service prices in an economy could be controlled. However, although there is a link between the general level of prices in an economy and the amount of money, it is not rigid, and prices can move up and down for a myriad of reasons.
Nevertheless, the general relationship in the Quantity Theory of Money stands. More money in an economy (inflation) tends to lead to higher prices and less money (deflation) tends to lead to lower prices.

What You Need to Know NOW About Protecting Yourself from Deflation The best way to protect yourself from deflation is to first understand what it is. In this free, special report, you'll learn about this unexpected risk and what it can do to your portfolio. You'll also get 29 specific forecasts for stocks, real estate, gold and new cultural trends, to help you prepare and protect your wealth. Get instant access

Your Bond Fund: It's Riskier Than You Think Quantitative Easing (QE) changed the bond markets in ways many don't realize. And now that QE is unwinding, investing in bonds comes with pitfalls that are too risky to overlook. This new resource from EWI's Murray Gunn offers insights you don't want to miss. Get your free report, Your Bond Fund: It's Riskier Than You Think. Get free, instant access

This article was syndicated by Elliott Wave International and was originally published under the headline Deflation Basics Series: The Quantity Theory of Money. 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.

What Happens When the Fed FINALLY Reduces Its $4.5 Trillion Balance Sheet?

From the Insights column of our Interest Rates Pro Service

By Elliott Wave International

So, there we have it. Deflation has started.
The Federal Reserve announced last month that they would start to reduce their $4.5 trillion balance sheet in October, thereby starting the process we call Quantitative Tightening (QT). As expected, they are aiming to do it gently and quietly, by not reinvesting bonds as they mature, starting with sums of around $6 billion of Treasuries and $4 billion in Mortgage-Backed Securities (MBS). The scale of non-reinvestment will gradually increase. Once in full swing, the Fed's balance sheet could reduce by up to $150 billion each quarter.
Conventional analysis might conclude that the Fed's balance sheet reduction (deflation) would be bad for US Treasuries and MBS -- after all, those are the instruments not now being bought by the Fed. Notwithstanding the fact that we dismiss that sort of causality thinking anyway, we're not conventional analysts, and take a different angle.
As the Insights column of our Interest Rates Pro Service alluded to last month, the Fed's QE program has crowded out investors in the US Treasury space. The market supply of US Treasuries was reduced by the Fed's program and so it forced bond investors to buy other instruments, such as corporate bonds. Now that more US Treasuries are going to be available for investment, those funds may be tempted to switch the corporate bonds they hold back into ("safer") US Treasuries. The unintended consequence of QT, therefore, may well turn out to be a widening in corporate bond yield spreads.
So, what to look for? Our Bond Market Monitor tracks corporate bond spreads on a daily basis, so the first sign of stress can be seen there. We will be keeping an especially close eye on the trend of the Bloomberg Barclays Global Aggregate Credit index yield spread because, as our chart below shows, it may have found solid support at the old 2014 low.

Your Bond Fund: It's Riskier Than You Think Quantitative Easing (QE) changed the bond markets in ways many don't realize. And now that QE is unwinding, investing in bonds comes with pitfalls that are too risky to overlook. This new resource from EWI's Murray Gunn offers insights you don't want to miss. Get your free report, Your Bond Fund: It's Riskier Than You Think. Get free, instant access

This article was syndicated by Elliott Wave International and was originally published under the headline What Happens When the Fed FINALLY Reduces Its $4.5 Trillion Balance Sheet?. 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.

On Bulls and Bears, and the Delicate Balance Between Them

By Elliott Wave International

3 Videos + 8 Charts = Opportunities You Need to See. Join this free event hosted by Elliott Wave International and you'll get a clear picture of what's next in a variety of U.S. markets. After seeing these videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won't get anywhere else. Get your FREE report now – for a limited time!

This article was syndicated by Elliott Wave International and was originally published under the headline On Bulls and Bears, and the Delicate Balance Between Them. 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.

Here's Why the Time to Worry About the "Fear Index" is NOW, Not Later

By Elliott Wave International

3 Videos + 8 Charts = Opportunities You Need to See. Join this free event hosted by Elliott Wave International and you'll get a clear picture of what's next in a variety of U.S. markets. After seeing these videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won't get anywhere else. Get your FREE report now – for a limited time!

This article was syndicated by Elliott Wave International and was originally published under the headline Here's Why the Time to Worry About the "Fear Index" is NOW, Not Later. 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.

Did You See the 30% Rise in This Major Global Stock Index?

By Elliott Wave International

3 Videos + 8 Charts = Opportunities You Need to See. Join this free event hosted by Elliott Wave International and you'll get a clear picture of what's next in a variety of U.S. markets. After seeing these videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won't get anywhere else. Get your FREE report now – for a limited time!

This article was syndicated by Elliott Wave International and was originally published under the headline Did You See the 30% Rise in This Major Global Stock Index?. 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.

Here's What Your Price Charts Are Hiding from You

By Elliott Wave International

3 Lessons: Learn to Spot Trade Setups on Your Charts In these three free video lessons, Jeffrey Kennedy shows you how to look for trading opportunities in your charts. Kennedy, instructor for EWI's popular Trader's Classroom service, explains how the 5 core Elliott wave patterns combined with technical methods can help you create a compelling forecast. Get instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Here's What Your Price Charts Are Hiding from You. 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.

Here's What Your Price Charts Are Hiding from You

By Elliott Wave International

3 Lessons: Learn to Spot Trade Setups on Your Charts In these three free video lessons, Jeffrey Kennedy shows you how to look for trading opportunities in your charts. Kennedy, instructor for EWI's popular Trader's Classroom service, explains how the 5 core Elliott wave patterns combined with technical methods can help you create a compelling forecast. Get instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Here's What Your Price Charts Are Hiding from You. 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.

This Indicator Stayed AHEAD of Silver for 18+ Months: See What It Says NOW

By Elliott Wave International

Should investors rely on traditional ways of evaluating the stock market's "proper value"? You might be surprised at what these four charts show.

3 Videos + 8 Charts = Opportunities You Need to See. Join this free event hosted by Elliott Wave International and you'll get a clear picture of what's next in a variety of U.S. markets. After seeing these videos and charts you will be ready to jump on opportunities and sidestep risks in some major markets. This free report (a $29 value) will present a unique outlook and give you a new perspective on the markets you won't get anywhere else. Get your FREE report now – for a limited time >>

This article was syndicated by Elliott Wave International and was originally published under the headline This Indicator Stayed AHEAD of Silver for 18+ Months: See What It Says NOW. 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.