Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse"

This suggests "a burgeoning slowdown in economic activity"

By Elliott Wave International

It may seem strange to bring up deflation when surveys show that inflation is the public's number one worry.

But who would have thought that inflation would become a big issue, say, just two years ago?

Right -- a relatively small percentage of people. The point is: Things can unexpectedly change -- fast.

Consider the price of commodities: The Goldman Sachs Spot Commodity Index hit a high on March 8, and so did the Bloomberg Commodity Index. Crude oil futures made an intraday high on March 7 and a closing high on March 8. Platinum reached a closing high on March 7.

The July Global Market Perspective, a monthly Elliott Wave International publication which covers 50-plus worldwide financial markets, mentioned other commodities which also made highs during the same time as it showed this chart and said:

Aluminum, copper and zinc topped [on March 7], as did nickel and lead. The significant price declines since March 7-8 suggest a burgeoning slowdown in world economic activity and may mark a tipping point from inflationary pressures to deflationary ones.

So, you see why deflation is not such a far-fetched notion after all.

Indeed, at least a couple of other factors point to "a burgeoning slowdown in world economic activity."

The first is widespread layoffs. Just a few months ago, technology companies were on a major hiring spree, which is in stark contrast from what's going on now (Marketwatch, June 21):

From Great Resignation to Forced Resignation: Tech companies are shifting to layoffs after a huge ramp up in hiring

Layoffs have also been notable in cryptocurrency and real estate companies.

Another indication of a global economic slowdown can be summed up in this headline from FreightWaves, a supply chain industry information company (June 7):

US Import Demand is Dropping Off a Cliff

U.S. containerized imports from all countries declined 36% year-over-year.

Getting back to commodities, the Elliott wave model can help you determine "what's next" with a high degree of confidence.

While no analytical method can see into the future, Elliott waves do reflect the repetitive patterns of investor psychology. Here's what Frost & Prechter said in their Wall Street classic, Elliott Wave Principle: Key to Market Behavior:

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

You can access the entire online version of the book for free once you become a member of Club EWI -- the world's largest Elliott wave educational community (about 500,000 worldwide members and growing).

A Club EWI membership is also free and opens the door to complimentary access to a wealth of Elliott wave resources on financial markets, investing and trading.

Click the link to get started right away: Elliott Wave Principle: Key to Market Behavior -- get instant and free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse". 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 a Major Indicator of "Housing Busts" is Showing Now

"It was the first such decline since November 2015"

By Elliott Wave International

The housing market tends to go the way of the stock market, and nearly everyone knows that the stock market has been sliding.

There's another housing market indicator that the July Global Market Perspective, a monthly Elliott Wave International publication which covers 50-plus financial markets, mentioned:

[Home] sales declines invariably lead the way into housing busts. This one ... should arrive faster and more forcefully than the experts expect.

Homes sales have already begun to decline:

• U.S. existing home sales fall for third straight month; house prices at record high (Reuters, May 19)
• Sales of existing homes fell in May, and more declines are expected (CNBC, June 21)

Sales of luxury homes in some areas have dropped significantly. As examples, in Nassau County, NY, Oakland, CA, Dallas, TX, Austin, TX and West Palm Beach, FL, annual drops in the rate of upper-end home sales for the three months ended April 30 stretched from 32.8% to 45.3%.

As June numbers roll in, more signs of a real estate slowdown are evident. For instance, the number of active U.S. home listings jumped 18.7% in June from a year earlier, the largest annual increase since the data started in 2017.

The housing bubble is by no means confined to the U.S. Bloomberg reports that New Zealand, Australia and Canada look even more "frothy" than the U.S.

And, then there's China. Here's a chart and commentary from the June Global Market Perspective:

Month-to-month prices of China's new-home sales turned negative in September, and they've continued to fall since. The year-over-year average of new home prices also fell in April. It was the first such decline since November 2015.

In Elliott Wave International's view, housing markets around the globe are on shaky ground and those who bought at the peak of this latest housing boom better be prepared.

It was mentioned at the top of this article that housing markets within a nation tend to trend with that nation's stock market.

Elliott wave analysis can help you get a perspective on stock markets anywhere in the world.

If you're unfamiliar with the Elliott wave model, you are encouraged to read Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior.

Here's a quote from that book:

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

If you'd like to read the entire book, do know that you can access the online version for free once you join Club EWI, the world's largest Elliott wave educational community.

Club EWI is free to join, and members enjoy complimentary access to videos and other resources on how the Wave Principle can help them navigate financial markets.

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

This article was syndicated by Elliott Wave International and was originally published under the headline What a Major Indicator of "Housing Busts" is Showing 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.

Europe On Sale: Get It While U Can

By Elliott Wave International

On July 13 and 14, the euro and the U.S. dollar briefly traded at parity -- for the first time in 20 years.

Just 19 months ago, EURUSD was at $1.2350. It's quietly dropped 20%+ since.

Quietly? Yeah, because of all the other fireworks in the market drowned out the news.

What would you have done with this knowledge a year and a half ago?

For one thing, you'd have put off that European vacation until now!

Who could have known? EWI subscribers. Check out this forecast from EWI back on January 8, 2021:

It appears that currencies are delivering the early New Year trend reversal that often occurs. The [Euro]'s high at 1.2350 on Wednesday, January 6, completes the five-wave rally from at least November 4, 2020 (1.1604) and likely from March 23, 2020 (1.0635)...Greater bearish potential exists...

Every student of Elliott knows that when five waves finish, you should anticipate a reversal of equal degree.

Here's what happened since:

Mmmm, I love a good chart.

And a great tweet. Tip of the hat to Mr_Cuddlez!

So, are you ready to catch the next big euro move?

EWI's Chief Market Analyst Steven Hochberg guides our Financial Forecast Service subscribers 3X/week through the twist and turns in the euro (and dollar) -- plus, U.S. stock indexes, bonds, gold and silver -- inside his Short Term Update.

Right now, read our forecasts for all of the markets listed above (and more) inside our Financial Forecast Service Test Drive -- just $17 for a full week's access.

Join the Financial Forecast Service Test Drive now.

Hurry: Your one-time Test Drive opportunity ends Thursday, July 28th.

This article was syndicated by Elliott Wave International and was originally published under the headline Europe On Sale: Get It While U Can. 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.

Cryptos: Welcome to the "Lunatic Fringe"

A crypto hedge fund going all the way down to $0 is one way you know it's "a Grand Supercycle peak"

By Elliott Wave International

The bankruptcy of crypto broker Voyager Digital has been widely reported.

Now, another crypto investment "bites the dust."

This time -- it's Three Arrows Capital (3AC) -- a crypto hedge fund which went from "$10 billion to zero."

Here's a July 12 headline (Bloomberg):

Three Arrows Co-Founder Re-Emerges With Tweet Accusing Liquidators of 'Baiting'

The entire crypto market is down by more than $1 trillion since April.

Of course, Bitcoin is a big part of the crypto universe and its big decline since its November 2021 high of $68,906 has contributed substantially to that drop in the overall crypto market.

Bitcoin dropped all the way to $17,614 just in June.

And, speaking of Bitcoin's top, the November 2021 Elliott Wave Financial Forecast, a monthly publication which covers key U.S. financial markets, said this just five days before that top was hit:

Last month, the Elliott Wave Financial Forecast listed some of the many bull market milestones produced by cryptocurrency bulls over the course of 2021. This is the lunatic fringe of a Grand Supercycle peak. ...

So, the decline of Bitcoin and the implosions in the world of crypto were not surprising to our Elliott Wave Financial Forecast analysts.

The Elliott Wave Financial Forecast continued to provide updates on the world of crypto, including the February issue in which this chart and commentary were provided:

The Squid Game, a crypto coin based on the TV show of the same name, was another noteworthy issue EWFF covered at bitcoin's peak, as it had already crashed. ... It then rallied to November 6, and this updated chart shows what happened after that; another 97% decline. But get this: The Squid Gamers are still bullish.

As of this writing on July 12, Squid Game crypto is trading even lower than it was in February.

The question now is: What's next for crypto investments?

The Elliott wave model provides a big clue.

If you'd like to learn how Elliott wave analysis can help you with financial markets, read Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter.

Here's a quote from this Wall Street classic:

Without Elliott, there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths. Elliott's highly specific rules reduce the number of valid alternatives to a minimum.

No analytical method can guarantee a particular outcome in financial markets but given Elliott waves reflect the repetitive patterns of investor psychology, the knowledge those waves provide about the market's position within the behavioral continuum is extensive and second to none.

You may be interested in knowing that you can access the online version of the book for free once you join Club EWI, the world's largest Elliott wave educational community.

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

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

This article was syndicated by Elliott Wave International and was originally published under the headline Cryptos: Welcome to the "Lunatic Fringe". 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.

Wipeout! New Update on Our "Green Bond" (ESG) Forecast

Excessive euphoria in financial markets is usually a big reason to be "skeptical"

By Elliott Wave International

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

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

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

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

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

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

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

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

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

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

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

The wipeout could be one of the biggest ever.

You can see the big price tumble that occurred thereafter.

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

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

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

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

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

See what warnings it's issuing now.

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

This article was syndicated by Elliott Wave International and was originally published under the headline Wipeout! New Update on Our "Green Bond" (ESG) Forecast. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Ah, Snap! Here's What Snap Inc.'s Action is Likely Signaling

"Air-pocket declines ... are harbingers"

By Elliott Wave International

Snap Inc. is the company which developed Snapchat, the social media app which allows users to customize the content they share with others -- right in the app.

Recently, the firm introduced Snapchat+ -- available for $3.99 a month.

Snap could use some success -- it's been a tough go lately.

The June Global Market Perspective, a monthly Elliott Wave International publication which covers 50-plus worldwide financial markets, showed this chart and said:

Technology routs are becoming more contagious. On [May 24], when Snap Inc. announced that it will slow hiring as it braces "to miss earnings and revenue targets," its shares declined more than 44%, and other social media giants quickly followed. ... The air-pocket declines in various indexes and stocks matter, a lot. They are harbingers.

On May 27, the day the June Global Market Perspective published, Snap's stock price was trading at $15.58.

As of this intraday writing on July 6, the price is even lower -- $14.18.

Despite the big price drops in well-known technology names, you might be surprised to learn that many professional market observers are still bullish.

Indeed, here's a June 22 Yahoo! Finance headline:

Analysts remain 'unusually bullish' about S&P 500 stocks despite downturn

In Elliott Wave International's view, the combination of the downtrend in U.S. stocks with a highly bullish sentiment is nothing less than a major warning sign.

But what about stocks in other parts of the world?

The Global Market Perspective has you covered, whether you are interested in the U.S., Asia-Pacific, Europe or other parts of the globe.

For example, our just-published July Global Market Perspective says:

The FTSE's long-term waves have ... frustrated the bulls and bears alike. At its June 17 intraday low of 6998, Britain's benchmark index stood just 47 points above its intraday peak on December 30, 1999. In other words, an entire generation of investors underwent an agonizing 22 years of ups and downs and now has less than a single percentage point of capital gains to show for it.

That comment is accompanied by a chart which shows the Elliott wave structure of the FTSE, and hence, what you can expect next.

If you want the details of how the Elliott wave model can help you analyze financial markets, here's a suggestion: Read Frost & Prechter's book, Elliott Wave Principle: Key to Market Behavior.

Here's a quote from this Wall Street classic:

All waves may be categorized by relative size, or degree. The degree of a wave is determined by its size and position relative to component, adjacent and encompassing waves. [R.N.] Elliott named nine degrees of waves, from the smallest discernible on an hourly chart to the largest wave he could assume existed from the data then available. He chose the following terms for these degrees, from largest to smallest: Grand Supercycle, Supercycle, Cycle, Primary, Intermediate, Minor, Minute, Minuette, Subminuette. Cycle waves subdivide into Primary waves that subdivide into Intermediate waves that in turn subdivide into Minor waves, and so on. The specific terminology is not critical to the identification of degrees, although out of habit, today's practitioners have become comfortable with Elliott's nomenclature.

If you'd like to learn more, know that the entire online version of the book is available to you free once you join Club EWI -- the world's largest Elliott wave educational community.

A Club EWI membership is free, and members enjoy free access to a wealth of Elliott wave resources on investing and trading without any obligations.

You can have the book on your screen in moments as you follow this link: Elliott Wave Principle: Key to Market Behavior -- instant and free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Ah, Snap! Here's What Snap Inc.'s Action is Likely Signaling. 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 Prepare for a Hard-Hitting Bear Market (Think 1929-1932)

This metric of bullishness is higher than it was at the top of the dot-com mania

By Elliott Wave International

An important step in preparing for a historic bear market is to embrace cash or cash equivalents.

This may seem obvious, but even with the stock market in a downtrend, cash is shunned by many an investor -- retail and professional. Many of these investors believe the bull market will resume -- sooner rather than later.

As the May Elliott Wave Theorist, a monthly publication which analyzes financial markets and major cultural trends, noted:

The percentage of assets dedicated to equities in American Association of Individual Investors members' portfolios remains near a bullish extreme. ... They think a "correction" is in force but not a bear market.

So, AAII members have been holding more stocks than cash.

Here in July, investors continue to hold out hope for a resurgence of the bull. This chart and commentary are from the just-published Elliott Wave Financial Forecast:

This chart shows the percentage that U.S. households have in equities relative to their total assets and provides long term context. At 27.5%, the latest reading, from the end of the first quarter, is higher than the peak reading of 26.3% at the top of the dot-com mania in the first quarter of 2000!

Professional market observers likewise dislike cash (Bloomberg, July 27):

S&P Analysts Haven't Been This Bullish In 20 Years

The point is: If you have a portfolio of mainly cash (or equivalents), you'll be in the minority, which history shows is usually the best place to be when a market is transitioning from a bear to bull or bull to bear.

Just make sure your cash is kept in the safest institution possible.

You see, speaking of history, Elliott Wave International President Robert Prechter wrote this in his March Elliott Wave Theorist:

Between 1929 and 1933, 9000 banks in the United States closed their doors. ... Well before a worldwide depression dominates our daily lives, you will need to deposit your capital into safe institutions.

You may say, "My deposits are insured up to $250,000 by the Federal Insurance Deposit Corporation -- why should I worry about my bank's stability?"

The March Elliott Wave Theorist explains why you should not rely on the F.D.I.C. and provides a wealth of other insights into protecting your financial safety -- as well as your physical safety.

If the bear market turns out to be as severe as Elliott Wave International anticipates, social and political turmoil are likely to erupt.

Now is the time to learn the important message of the stock market's Elliott wave pattern.

If you're unfamiliar with Elliott wave analysis, you are encouraged to read Frost & Prechter's Elliott Wave Principle: Key to Market Behavior. Here's a quote from this Wall Street classic:

The practical goal of any analytical method is to identify market lows suitable for buying (or covering shorts) and market highs suitable for selling (or selling short). When developing a system of trading or investing, you should adopt certain patterns of thought that will help you remain both flexible and decisive, both defensive and aggressive, depending upon the demands of the situation. The Elliott Wave Principle is not such a system, but is unparalleled as a basis for creating one.

Despite the fact that many analysts do not treat it as such, the Wave Principle is by all means an objective study, or as [Charles J.] Collins put it, "a disciplined form of technical analysis."

Here's the good news: You can read the entire online version of the book for free once you become a Club EWI member.

Club EWI is the world's largest Elliott wave educational community with approximately 500,000 worldwide members and is free to join. Members enjoy free access to a treasure trove of Elliott wave resources on investing and trading without any obligations.

Interested? If so, just follow the link and you can have the book on your screen in just a few moments: 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 How to Prepare for a Hard-Hitting Bear Market (Think 1929-1932). 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.

Netflix: Way More Room to Drop

"Doubled eleven times in 19 years ... then cut in half twice"

By Elliott Wave International

The glory days of at least one of the FAANG stocks appear to be all but over -- at least for now.

As revenue shrinks at Netflix, more heads have rolled at the subscription-based streaming service of movies and television shows.

A June 23 Variety headline says:

Netflix Begins Second Round of Layoffs, 300 Positions Cut

About a month ago, around 150 employees were let go.

The layoffs are also occurring amid a deflation in the company's stock price.

The May Elliott Wave Theorist, a monthly publication which offers analysis of financial markets and cultural trends, provided this chart and eye-opening perspective:

Netflix is down 70% from its high. Many people think it can't go lower. Is this an indication that stocks are near a major bottom?

[The chart] shows the stock's price history. From its low at $0.35 in 2002, Netflix doubled eleven times in 19 years to reach 700.99. Since then, it has been cut in half twice. There is certainly room for more halvings. If you want to monitor the milestones, they are: 700.99, 350.50, 175.25, 87.62, 43.81, 21.91, 10.95, 5.48, 2.74, 1.37, 0.68 and 0.34.

Keep in mind that this is a picture of a stock that has been aggressively bid lower since November 2021. Many stocks are still near highs and have far more room to fall than Netflix.

Since the end of Q1 alone, Netflix's stock is down 53% with a price of $176.32, as of this intraday writing on June 29.

The Elliott Wave Theorist is also keeping subscribers apprised of the stock market's big picture and just know that most investors have no idea of what is likely just ahead.

Yes, the Elliott wave structure of the main U.S. stock indexes is sending a clear and ominous message.

If you'd like to learn how the Elliott wave model can help you analyze financial markets, you are encouraged to read Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here's a quote from that book:

After you have acquired an Elliott "touch," it will be forever with you, just as a child who learns to ride a bicycle never forgets. Thereafter, catching a turn becomes a fairly common experience and not really too difficult. Furthermore, by giving you a feeling of confidence as to where you are in the progress of the market, a knowledge of Elliott can prepare you psychologically for the fluctuating nature of price movement and free you from sharing the widely practiced analytical error of forever projecting today's trends linearly into the future. Most important, the Wave Principle often indicates in advance the relative magnitude of the next period of market progress or regress. Living in harmony with those trends can make the difference between success and failure in financial affairs.

Here's the good news: You can read the entire online version of the book for free once you become a Club EWI member.

Club EWI is the world's largest Elliott wave educational community and is free to join. More than that, members enjoy free access to a wealth of Elliott wave resources on investing and trading without any obligations.

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

This article was syndicated by Elliott Wave International and was originally published under the headline Netflix: Way More Room to Drop. 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.