Wave Principles and Stock Markets
U.S.economy is according to some on the verge of the recession, according to others it is already in recession. The stock markets are falling down. Not only in USA, they are falling down across the globe.
Breaking News Alert from NYT
Stock Markets in Europe Plunge 7 Percent
Stocks Open Sharply Lower Despite Interest-Rate Cut
Asian Stock Markets Plunge for Second Day
The experts outdo one another in economical prophecies. Media sound the alarm
about the inflation. Everyone across the world seems to be touched by the problems. I
think it is very interesting to observe. It reminds me of the snowball
effect. The more it rolls the bigger it gets.
It is like with Elliott waves
that show the collective investor (or crowd) psychology and interactions move
from optimism to pessimism and back again. These swings create patterns, as
evidenced in the price movements of a market at every degree of trend.
"The wave patterns are an organizing
principle for myriad social behaviors, ranging from newspaper sales figures to
the fortunes of national leaders. The reason Elliott waves can tell us all this
is simply because they are direct reflection of human psychology - the rhythms
of human emotion, as Elliott puts it." (I know what you'll do next
summer, New Scientist, 31st August 2002).
Interesting
how the herd behavior and emotions influence even the stocks market. It is
incredible to see how everythink is linked and depend on one another.
Tags: stock markets, elliott waves, herd
Interesting - maybe you should cross post this one over at "share a brainwave" - http://www.shareabrainwave.net/ ?
Posted by: Trine-Maria | January 24, 2008 at 11:00 AM
Excellent post. Many investors have no idea that they are running with the herd and damaging their own financial prosperity. Everyone that wants to improve their trading results should learn how to analyze markets using Elliott Wave Theory.
Posted by: Ken Holmes | January 23, 2008 at 02:17 PM