Elliott Wave Courses | by ForexCycle.com | Sunday, 27 September 2015 05:45 UTC
By Elliott Wave International
Bespoke Investment Group uses an interesting term to describe recent stock market action: "all or nothing." In the stock market, "all or nothing" days occur when at least 80% of the stocks in the S&P 500 index advance or decline.
It's typical to see a spike in "all or nothing" days when there's a jump in market volatility. But the recent unrest in the stock market has seen a rare phenomenon:
Specifically, there were 11 of these occurrences in the 15 trading sessions.
Also, in a one-month period, the CBOE Volatility Index jumped 120%. Yet -- the panic we saw in the market in late August proves that few traders saw it coming.
Elliott Wave International's subscribers were prepared better than most. On August 19, EWI's Elliott Wave Theorist called for a "pandemonium" in stocks, and a few weeks before, EWI's July Elliott Wave Financial Forecast offered this chart and commentary:
You remember what soon followed: Stocks fell hard, and on August 24, the S&P cash index saw a selloff low of 1867.01.
Since then, as our September 11 Short Term Update chart below shows [wave labels available to subscribers], trading volume has steadily contracted.
Some stock market bulls are bolstered by the lull in trading volume. But know this: Our indicators strongly suggest that now is not the time for such confidence in a continued uptrend. We expect the number of "all or nothing" days, to use Bespoke's term, to increase dramatically when volatility returns.
These are just a few examples of the insights that EWI brings their subscribers every month. See below how you can read the complete August Theorist -- FREE.
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