I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Tuesday, September 1, 2009

This is a *Must Listen* Post!

Most of those who read my blog already believe in the validity of the Elliott Wave Principle. Some don't and that's fine too :)

But it is much more than simply wave counts (as you are aware). Social Mood is *key*. This is why I have my Primary 2 checklist (shown below), that I have listed in several of my posts. This is why sentiment is a critical contrarian measure. This is *especially* why government economists are a contrarian measure.

You must listen to this interview with Bob Prechter from King World.

I found it through http://erikmarketview.blogspot.com/2009/08/twilight-zone-bear-etf-crack-down.html. Erik has a great site, definitely read it!.

This interview is the a very good overview of EWP (the book) and a lot of other interviews Bob has given in the past. Specifically he talks about social mood and herding behavior. This is well worth 30 minutes of your time.

Here is my P2 Checklist for review (listen to the above interview and then look at this checklist again):

- X -    VIX Low
- X -    BPSPX (and other bullish indicators) at higher highs than 2007 peak
- X -    CPC at uber-bullish levels
- X -    Investor Sentiment above 80%
- X -    Economists declaring "end of the recession"
- X -    Analysts upgrading everything
- X -    "Speculative Leader" indices showing weakness / bearish divergence
-    -    Clear end count for P2

.... And almost on that last one. Things are certainly in place.
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