30/03/2010 – Your Cheatin’ Chart Will Tell On You

“Your cheating chart will tell on you.”
Hank Williams may not have known about Elliott waves, but he
did know when a story doesn’t add up.
Such is the case with the nominal rise of the Dow Jones Industrials
from 2000 to 2007. In the language of country music, this stock
index has a “Cheatin’ Chart” — it doesn’t tell the
real story.

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You don’t have to tell Bob Prechter this: He knows. A simple
price chart of the Dow is, well, a bit too simple. First
Bob explains that pricing via fiat currency is not the same as
pricing the Dow in terms of real money (namely gold). Then he
shows the difference.

For six long years, we’ve had declining real values in
stocks. Since the 2002 bottom, we’ve had rising values in nominal
terms. This is the same set-up that we saw in the early ’70s
except for one thing: it’s bigger. . .Ultimately, real prices
are leading dollar prices, and we’re going to see a tremendous
drop in the dollar price of the Dow as well, because I’m making
a case that this is a much bigger top.
Elliott Wave Theorist,
December 2006

If gold were our money, the major stock market indexes
would have declined relentlessly from 2000 to the present, with
a muted bounce in 2003. There would be no arguing the point
of whether a bull or bear market was in force.
Elliott Wave Theorist,
March 2006

This “oh-so-true” chart of the DJIA priced
in gold showed the path that the “cheatin'” nominal
Dow would eventually follow. Our forecast was that it’s just a
matter of time. This analysis has played out as expected several
times since the 1999 high in the Dow Jones Industrials.

The July 1999 top in the real Dow was the first in a
long succession of rolling blow-offs that (The Elliott Wave
Financial Forecast) successfully identified From the DJIA’s
orthodox top in 2000 to the NASDAQ’s all-time high several weeks
later to the top in residential real estate prices in 2005 to
the nominal peaks in major stock indexes in 2007 to the wild
commodity spikes in 2008, EWFF managed to anticipate many of
the markets major trend changes. . .We owe these forecasting
successes to the Wave Principle and its reflection of market
psychology and its foreshadowing of larger social forces.
Elliott Wave Financial Forecast,
July 2009

The monthly Elliott Wave Financial Forecast
keeps a tireless eye on stocks, real estate, commodities and much
more. We also keep track of the precious metals and the dollar
— and even keep our finger on the pulse of developing social
trends.

The quotes above confirm the power of Elliott wave
analysis in identifying market turns in various asset classes.

Elliott Wave International (EWI) is the world’s
largest market forecasting firm. EWI’s 20-plus analysts provide
around-the-clock forecasts of every major market in the world
via the internet and proprietary web systems like Reuters and
Bloomberg. EWI’s educational services include conferences, workshops,
webinars, video tapes, special reports, books and one of the internet’s
richest free content programs, Club EWI.

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