What This Survey Reveals About Investor Sentiment

Swings in mass emotions tend "to follow a similar path each time around"

By Elliott Wave International

After a multi-month rally since the March low, many stock market investors remain optimistic.

Here are a sample of October headlines:

• [Major bank] lays out 3 reasons why the stock market will continue to rise ... (Business Insider, Oct. 11)
• 'Get long' -- ... stocks higher no matter who wins election (CNBC, Oct. 12)
• ... Study Reveals Retail Investors Remain Bullish ... (businesswire.com, Oct. 14)
• Big Money is Bullish ... (Money & Markets, Oct. 21)

This continued financial optimism is not surprising. Indeed, it's to be expected at this juncture in the stock market's trend.

As the Wall Street classic book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter, says:

The progression of mass emotions from pessimism to optimism and back again tends to follow a similar path each time around, producing similar circumstances at corresponding points in the wave structure.

And, right now, it appears the current mass emotion of optimism has progressed to an extreme.

The Oct. 21 U.S. Short Term Update, a thrice-weekly Elliott Wave International publication which focuses on near-term forecasts for major U.S. financial markets, showed this chart and said:

This week's Investors Intelligence Advisors' Survey has pushed to 59.2% bulls, just shy of the September 1-2 extreme. The red arrows on the chart show the four prior instances since September 2018 when the II survey was at a similar level or slightly higher.

The Investors Intelligence Advisors' Survey doesn't mean that the stock market will make a dramatic turn on specific day in the near future. Market history repeats, but not exactly.

The best approach at this juncture is to keep a close eye on the market's unfolding wave structure.

Let's return to Elliott Wave Principle: Key to Market Behavior:

No matter what your convictions, it pays never to take your eyes off what is happening in the wave structure in real time. Ultimately, the market is the message, and a change in behavior can dictate a change in outlook. All one really needs to know at the time is whether to be long, short or out. ...

Would you like to have all of the book's content available to you -- free?

Well, Elliott Wave International has made that possible -- all that's required is a Club EWI signup, which is also free. Club EWI is the world's largest Elliott wave educational community with approximately 350,000 members (and growing). Members enjoy free access to a wealth of investing and trading insights from an Elliott wave perspective.

You can have the online version of this Wall Street classic on your computer screen in moments by following this link: 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 What This Survey Reveals About Investor Sentiment. 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.

 

Do These Explanations Make Sense for This Intraday Stock Market Turn?

The market "is not propelled by ... external causality"

By Elliott Wave International

On Oct. 19, the DJIA had been trading higher for much of the morning, but by the last hour of trading, the index was more than 400 points in the red.

During that last hour of trading, a major financial website offered this explanation (CNBC):

Dow drops more than 400 points as stimulus uncertainty grows and coronavirus cases rise

Also toward the end of that day's trading, the Wall Street Journal said:

U.S. Stocks Fall on Stimulus Worries

Well, these explanations seem to make sense. However, one must also consider that the lack of progress on another stimulus package and an increase in coronavirus cases are nothing new.

Moreover, the stock market has seen advances when bad news on either or both fronts were grabbing headlines.

For example, on August 12, Barron's said:

The S&P 500 Closed Just Below a New High

U.S. stocks gained on Tuesday, despite the lack of progress in efforts to negotiate another stimulus package ...

And, on Sept. 25, Barron's said:

The Dow Rises Despite Virus ...

Note that word, despite. Even in cases when the news clearly doesn't fit the market action, news outlets still try to tie one to the other. You see it all the time. It's hard to blame them, because almost everyone is conditioned to expect the news to drive the market.

But getting back to our example, it seems questionable that stimulus uncertainty or COVID-19 developments caused the DJIA's slide on Oct. 19. Indeed, it didn't; a change in market sentiment did.

As the Wall Street classic book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter, says:

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.

So, what does determine the path of market prices?

The answer is, market psychology, which unfolds according to the paths described by the Elliott Wave Principle. This illustration shows the basic design in both bull and bear markets:

As Elliott Wave Principle: Key to Market Behavior says:

One complete cycle consisting of eight waves ... is made up of two distinct phases, the five-wave motive phase ... and the three-wave corrective phase. ... When an initial eight-wave cycle ends, a similar cycle ensues, which is then followed by another five-wave movement.

When you look at the news to gauge what's next for the market, you are by definition putting yourself one step behind. First, something must happen, then the market is supposed to react -- and only then you can act.

By contrast, when you track wave patterns in market charts, you can see what pattern is underway now, so you can predict what pattern is next -- news or no news. Now you are one step ahead!

So, look to Elliott wave analysis rather than the news for insights into the market's next big move.

Once again, let's return to Elliott Wave Principle: Key to Market Behavior:

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.

Learn more about how the Elliott wave model can help you navigate widely traded financial markets by reading the online version of Elliott Wave Principle: Key to Market Behavior for free.

Follow this link to get started: Elliott Wave Principle: Key to Market Behavior -- unlimited, free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Do These Explanations Make Sense for This Intraday Stock Market Turn?. 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.

 

Global Banking: Some Sectors Look as "Precarious as Ever"

"Financial flameouts" are occurring despite relief from the European Central Bank

By Elliott Wave International

Most people remember that the entire global financial system teeter-tottered on collapse during the 2007-2009 financial crisis due to the debacle related to subprime mortgages.

As you'll recall, even a financial institution as large as Citigroup was brought to its knees.

Of course, that was more than a decade ago and the fear of a "financial Armageddon" would seem to be a distant memory.

However, here in 2020, some European banking sectors appear to be on shaky ground, despite the European Central Bank's regulatory relief.

As a Sept. 17 Bloomberg article notes:

Banks Get More Capital Relief as ECB Wants Stimulus to Work

With a looser leverage ratio for the next nine months, banks will be able to make more loans with less capital.

Mind you, this is a fourth round of regulatory relief. Even so, some of the Continent's banks remain in a highly precarious position.

Elliott Wave International's October Global Market Perspective, a monthly publication which provides forecasts for 40-plus markets worldwide, showed these charts and said:

The ECB agreed to a fourth round of relief only because the previous three rounds failed. ... In total, the four rounds of regulatory relief equated to €73 billion, yet, for all the ECB's hard work, some banking sectors look to be as precarious as ever.

The snapshot comes from Spain, where Banco Sabadell, Spain's fifth-largest banking group, has barely retraced any of its 73% crash since December 2019. BBVA also continues to make fresh new lows, and Bankia ... is still off 33% since last year's high.

Clearly, the weakening position of these banks, even with all the financial assistance, is not a good development.

Yet, there's even more cause for concern.

The October Global Market Perspective also analyzes the "financial flameouts" of two other European banks, one of which is a global giant.

The financial woes of some European banks are just one sign of what appears to be a developing global deflation.

Prepare by reading the free report, "What You Need to Know Now About Protecting Yourself from Deflation." Here's an excerpt:

The psychological aspect of deflation and depression cannot be overstated. When the trend of social mood changes from optimism to pessimism, creditors, debtors, investors, producers and consumers all change their primary orientation from expansion to conservation. As creditors become more conservative, they slow their lending. As debtors and potential debtors become more conservative, they borrow less or not at all. As investors become more conservative, they commit less money to debt investments. As producers become more conservative, they reduce expansion plans. As consumers become more conservative, they save more and spend less. These behaviors reduce the "velocity" of money, i.e., the speed with which it circulates to make purchases, thus putting downside pressure on prices. The psychological change reverses the former trend.

The structural aspect of deflation and depression is also a factor.

Get insights into the "structural aspect of deflation," plus -- learn how to defend yourself and your loved ones by following this link: "What You Need to Know Now About Protecting Yourself from Deflation."

This article was syndicated by Elliott Wave International and was originally published under the headline Global Banking: Some Sectors Look as "Precarious as Ever". 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.

 

Earnings Season: Here's What Stock Investors Need to Know

By Elliott Wave International

Many investors and financial journalists believe that corporate earnings play a large role in driving stock market prices.

Here's just a couple of headlines from Oct. 13:

• Stocks open mixed on first day of earnings season (MarketWatch)
• U.S. Stocks Drop as Earnings Season Begins (Wall Street Journal)

The idea that earnings drive stock market prices seems to make sense. After all, corporations exist to make money, and if they exceed expectations, it seems logical that their share prices should skyrocket. If earnings disappoint, logic suggests that stocks should tank. And, in all fairness, when it comes to individual companies' earnings, they can and do affect prices -- although not always, and not always logically. But when you compare broad market performance with trends in earnings, you start to see a glaring disconnect. Why?

Because investors are not governed by pure logic. They are governed by collective psychology -- which swings from optimism to pessimism and back again, regardless of factors like GDP numbers, unemployment or -- yes, earnings.

Let's make the point by using a historical example from Robert Prechter's 2017 book, The Socionomic Theory of Finance. Here's a chart and commentary:

... in 1973-1974, earnings per share for S&P 500 companies soared for six quarters in a row, during which time the S&P suffered its largest decline since 1937-1942. This is not a small departure from the expected relationship; it is a history-making departure. ... Moreover, the S&P bottomed in early October 1974, and earnings per share then turned down for twelve straight months, just as the S&P turned up!

A more recent historical example is from the December 2009 Elliott Wave Financial Forecast, a monthly publication which provides forecasts for major U.S. financial markets:

... quarterly earnings reports announce a company's achievements from the previous quarter. Trying to predict future stock price movements based on what happened three months ago is akin to driving down the highway looking only in the rearview mirror.

You'll notice on the chart that in Q4 2008, the S&P 500 had its first negative earnings quarter ever. According to conventional logic, stocks should have crashed afterwards.

Instead, a rally started in March 2009, which stretched all the way into 2020.

If earnings and other factors outside of the market do not determine the trend of stock market prices, what does?

The answer is the Elliott wave model.

You can get important insights into how it works by reading the online version of Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter.

Here's a revealing quote from the Wall Street classic:

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.

At any time, the market may be identified as being somewhere in the basic five-wave pattern at the largest degree of trend. Because the five-wave pattern is the overriding form of market progress, all other patterns are subsumed by it.

All that's required for free access to the online version of the book is a Club EWI membership. Club EWI is the world's largest Elliott wave educational community and is free to join.

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

This article was syndicated by Elliott Wave International and was originally published under the headline Earnings Season: Here's What Stock Investors Need to Know. 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.

 

High-Profile Billionaire Gives Urgent Message to Stock Investors

By Elliott Wave International

In a deflationary depression, the prices of most financial assets crater, including stocks.

One well-known billionaire says it's time to shift into cash.

Here's an excerpt from a Sept. 22 CNBC article:

Billionaire media mogul Barry Diller on Tuesday urged investors to maintain sizable cash positions following the stock market's robust rally from coronavirus-induced lows in late March.

"Personally, and professionally, every nickel you can, keep it ... wherever it's banked," the chairman of both Expedia and digital media group IAC said ... "I think the market right now is a great speculation, I would stay home."

This calls to mind a chart and commentary from the April 2020 Elliott Wave Financial Forecast, a monthly publication which provides analysis of major U.S. financial markets:

In January, EWFF opened the year with a forecast titled, "2020 Foresight: Financial Assets and the Coming Return to Planet Earth." The centerpiece in our "return" scenario was a dissertation on the renewed value of cash. "In the 2020s, a countervailing public passion for cash will grab hold." Conquer the Crash anticipated this development by showing two charts of inverted stock averages in bear market periods. The point is that equities are the opposite of cash; risk-assets that require the surrender of cash. The relative value of cash will necessarily zoom higher when stocks plunge. The chart inverts the Dow's recent plunge to show the liftoff for a new bull market in cash, as discussed here in January. ... In a section on "The Wonder of Cash," CTC explained, "Owning an array of investments is financial suicide during deflation. They all go down, and the logistics of getting out of them can be a nightmare." It's not too late, but it's getting close, as CTC stated that the time to move into cash is before a sustained deflation emerges: "Then when the stock market reaches bottom, you can buy incredibly cheap shares that almost no one else can afford because they lost it all when their stocks collapsed." Also, be sure and check with CTC when it comes to the right forms of cash and cash equivalents. Not all of them will do. Chapter 15 covers the waterfront on that topic.

Also, read the special free report "What You Need to Know Now About Protecting Yourself from Deflation."

 

"Rates Down, Stocks Up"? Myth ... Busted!

Let's address widespread assumptions about interest rates and the stock market

By Elliott Wave International

There's a widespread belief that rising interest rates are bad for stocks and a lower interest rate trend is good for stocks.

The reasoning behind that belief is that bonds compete with stocks for investment funds. Hence, the higher the yield investors can get from bonds, the less attractive stocks become and vice-versa.

This assumption sounds logical, but in reality, stock market investors do not take their cue from rising or falling yields (or interest rates).

Yes, there have been times in financial history when rising rates have coincided with falling stock prices and vice versa. Yet, there have also been periods when stocks have risen as rates have risen, and times when lower rates have coincided with falling stock prices. A notable example of the latter in the U.S. occurred during the Great Depression of the late 1920s and early 1930s. The DJIA plummeted 89% from August 1929 to July 1932 as interest rates trended lower. Also, interest rates trended lower as the NASDAQ fell 78% from March 2000 to October 2002 and as the DJIA tumbled 54% from October 2007 into March 2009.

Even so, a September 2020 Financial Times column said:

Equity Investors Should Raise a Glass to Low Rates
This year, equity investors have been shouting "three cheers" for central banks.

Yet, the just-published October Global Market Perspective, an Elliott Wave International monthly publication which offers analysis of 40-plus worldwide markets, showed these two charts and said:

These two charts illustrate the fallacious, yet pervasive belief that falling interest rates are a big boost for stocks. Ten-year interest rates in Spain have dropped from 4% in 2007 to nearly 0% today. Yet the broad market IBEX plummeted almost 60% over the same span. In Portugal, 10-year rates were approaching 6% when the PSI 20 peaked at its 2000 all-time high. Rates surged to about 16% during the 2012 sovereign debt crisis and then crashed to 0.24%. Despite an overall decline in borrowing costs, the PSI-20 is lower today than it was in 2012, and shares are down an astounding 71% over the past 21 years.

So, it's a myth that the trend of interest rates determines the trend of the stock market.

Indeed, a review of financial history shows no reliable relationship between stock trends and any external factor.

However, the Elliott wave model's recognizable and repetitive patterns do offer predictive value for global stock market investors.

As the book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter, says:

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 [Elliott wave] guidelines are specific and can occasionally yield stunningly precise results.

Ah, yes, "results"!

Isn't that what every investor wants?

Delve into the online version of the Wall Street classic, Elliott Wave Principle: Key to Market Behavior, so you can learn the Elliott wave guidelines and gain other insights into the Elliott Wave Principle. You can do so 100% free when you become a member of Club EWI, the world's largest Elliott wave educational community (around 350,000 members and growing). Club EWI membership is free and allows you free access to an abundance of Elliott wave resources on financial markets, investing and trading.

Get started by following this link: Elliott Wave Principle: Key to Market Behavior -- free access.

This article was syndicated by Elliott Wave International and was originally published under the headline "Rates Down, Stocks Up"? Myth ... Busted!. 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.

 

Fear Grips Stock Market Short-Sellers -- What to Make of It

"This is easily the lowest wager against rising S&P rises" in the history of the data

By Elliott Wave International

As you may know, short-selling a stock means that a speculator is betting that the price will go down.

This is a lot riskier than taking a "long" position in a stock -- or, betting that the price will go up.

The reason why is that the most a speculator can lose by going long is 100% of his investment -- say, if a company goes out of business. However, the losses a short-seller can suffer is potentially unlimited, in other words, short-sellers can lose way more than their initial investment.

As a case in point, a November 2015 Marketwatch article noted that ...

... an investor placed a $37,000 short position on [a micro-cap pharmaceutical firm] earlier this month, only to find out a day later that the shares had shot up about 800%.

However, despite the high risk, there are speculators who elect to play the short side.

Recently, however, their ranks have been dramatically dwindling, given the strong stock market rally since the March low.

Indeed, here's an August 21 Bloomberg headline:

Bears Are Going Extinct

The September Elliott Wave Financial Forecast, a monthly publication which provides analysis and forecasts for major U.S. financial markets, showed this chart and noted:

The story under the Bloomberg headline features Goldman Sachs' data on the short interest in the median S&P 500 stock, which fell to just 1.8% of market capitalization in early August. As the chart shows, this is easily the lowest wager against rising S&P prices in the 16-year history of the data. "Skeptics are a dying breed in American equities," concluded Bloomberg.

What should market participants make of this extraordinarily low short interest in stocks?

Well, financial history shows that when bears become few and far between, it's time for the bulls to start worrying. The same applies when the bulls become few and far between.

In other words, sentiment extremes often correlate with trend changes.

Having said that, it's best to use sentiment measures in conjunction with the Elliott wave model.

When the two are sending the same message, an investor can arrive at a high-confidence market forecast.

If you'd like to get an in-depth understanding of the Elliott wave model, you are encouraged to read the book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter.

Here's a quote from the Wall Street classic:

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. More grandly, as the activity of social man is linked to the Fibonacci sequence and the spiral pattern of progression, it is apparently no exception to the general law of ordered growth in the universe.

The online version of Elliott Wave Principle: Key to Market Behavior is available to you for free when you join Club EWI, an Elliott wave educational community with about 350,000 members. Club EWI membership allows you to freely access a wealth of Elliott wave resources on financial markets, investing and trading without any obligations.

Get started by following this link: Elliott Wave Principle: Key to Market Behavior -- free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Fear Grips Stock Market Short-Sellers -- What to Make of It. 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: Why You Should Be Wary of the "Consensus"

Recent sentiment toward the yellow metal matched peak 2011 levels

By Elliott Wave International

You may recall investor optimism that attended gold's then record high of $1921.50 in September 2011.

A Gallup poll from that time period captured the prevailing sentiment. The Sept. 2, 2011 Elliott Wave Financial Forecast said a monthly publication which provides forecasts for major U.S. financial markets, said:

Perhaps the strongest sign of a gold top is a recent Gallup poll showing Americans now consider gold to be the best long-term investment. Gallup parsed the survey by gender, age, income level and political affiliation and in every single subset, gold won out. ... Everyone is onboard gold's uptrend. It is surely a sign of exhaustion.

Indeed, less than a week later, gold hit its then record high.

Well, as you probably know, gold went on to pass that record high here in 2020. The price reached $2072.12 on August 8.

The August 14 Elliott Wave Theorist, a monthly financial and social trends publication written by Elliott Wave International founder Robert Prechter, showed this figure and said:

[The figure] shows a 10-day moving average of Market Vane's Bullish Consensus toward gold. This indicator tracks the daily buy/sell recommendations of market analysts and commodity trading advisors. As you can see, the consensus is strongly bullish.

This strongly bullish was expressed less than two weeks later in this Yahoo! News headline (August 25):

Why $5000 Gold Could Soon Become A Reality

That's possible -- yet, if you've been keeping up with gold's price, you know that it's more than 4% lower (as of Sept. 25) than it was when the August 14 Elliott Wave Theorist discussed Market Vane's Bullish Consensus.

Should investors expect the "bottom to drop out" from here on out, or is there still more upside to go for gold?

Well, besides sentiment measures, it's also a good idea to keep an eye on the Elliott wave structure of gold's price chart.

As Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter, states:

The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market's general position and outlook. At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable.

Would you like to learn more about the Wave Principle?

Well, Elliott Wave International is making the online version of Elliott Wave Principle: Key to Market Behavior available to you free when you join Club EWI, the world's largest Elliott wave educational community. Don't worry -- Club EWI membership is also free and there are no obligations when you join.

Besides free access to the book, members are also granted free access to a wealth of Elliott wave resources on financial markets, investing and trading.

Get started by following this link: 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 Gold: Why You Should Be Wary of the "Consensus". 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.

 

Any Liquid Market, Any Timeframe: Know How to Spot New Opportunities Today

Learn simple techniques in this on-demand webinar, free ($129 value)

By Elliott Wave International

One positive development to come out of the 2020 pandemic is a widespread desire for financial independence. It's led everyone from retirees to Generation Z's to consider stock trading as a "cushion" against job uncertainty.

That's the good news! The bad news is, much of this new investment craze is being fueled by emotions and endorphins (hey -- all new traders have them!) rather than objective criteria. One leading economist coined the term "day-trading pandemic" in June to describe the "legions of participants pouring money into stocks without a care for the risks involved." (June 17 MarketWatch)

An August 11 NPR report confirmed the "addictive," "playing-with-fire" nature of this wave of new investing interest, in which first-time traders use free apps to impulsively jump into popular markets -- sometimes, only to meet ruinous ends.

Our friends at Elliott Wave International have been observing and forecasting markets and investor behavior for over 40 years. They believe that in order to succeed in this tough game, one must have a solid understanding of the market's patterned nature -- before safely stepping through that door.

EWI's chief instructor Jeffrey Kennedy is one of the world's leading practitioners and educators of the Elliott Wave Principle. If you are one of those new traders -- or maybe a seasoned veteran with more to learn -- his classic on-demand webinar "Introduction to Spotting Elliott Wave Opportunities" is your first step.

This 2-part, 2+hour course combines the best of Jeffrey's hard-won tips, tools, and techniques for using the Wave Principle to identify high-confidence trading opportunities -- on any market and any time frame.

But if there were only one part his students could take away from this course, it would be this chart described by Jeffrey in Part 1.

And now, let's take that idealized bearish setup and see how it plays out in real world markets.

Here, we turn to this chart of sugar prices in 2015-2016, when an 80% rally earned sugar the title of "best-performer of all commodities that trade on U.S. exchanges." (Oct. 3, 2016 Seeking Alpha)

Said one August 15, 2016 Seeking Alpha:

"The multiyear sugar bear turns bull. The second year of deficit can launch the sweet commodity even higher."

Yet at the same time, Jeffrey Kennedy recognized a long-term bearish Elliott wave setup on sugar's chart:

"I wouldn't be surprised to see this advance continue into September or even October of this year ... to an objective of 22.89.

"I will then look for a significant decline that should last for a number of years and easily push prices well below the low we experienced in 2015 at 10.13."

The next chart captures what happened next: After rallying into Jeffrey's cited target, sugar prices collapsed to become the "worst-performing commodity" of 2018.

The real-world applicability of the Wave Principle is undeniable. Imagine what else you can learn from Jeffrey's webinar.

How about:

• 3 core rules of Elliott wave analysis
• 5 core Elliott wave patterns
• What is Jeffrey's favorite Elliott wave pattern and why
• Easy signs to identify a market's trend
• Tricks for setting specific entry points, exit points and protective stops

-- and more!

When it comes to investing or trading, you can either "play with fire" -- or, you can arm yourself with an arsenal of objective tools and techniques to minimize risk and magnify high-confidence setups.

So, take Elliott Wave International's webinar "Introduction to Spotting Elliott Wave Opportunities" now -- a $129 value, it's yours 100% FREE with a fast, free Club EWI setup.

This article was syndicated by Elliott Wave International and was originally published under the headline Any Liquid Market, Any Timeframe: Know How to Spot New Opportunities Today. 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.