"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 16 hours Economists Polarized On Trump’s Tariff Plan
  • 1 day Why Are Investors Overlooking Gold Stocks?
  • 1 day The App That Democratized Trading Is Now Worth $5B
  • 2 days Super-Cycles: Why Gold Is Set For A Breakout
  • 2 days U.S. Sanctions Russia For Election Meddling And Cyberattacks
  • 2 days Snap Shares Tank Over ‘Slap Rihanna’ Campaign
  • 2 days How Low Can Bitcoin Go?
  • 2 days Amazon’s Japan HQ Raided In Anti-Monopoly Push
  • 2 days Is Barrick Gold Close To Finding A Bottom?
  • 2 days Morgan Stanley’s Top 10 Short-Term Stock Picks
  • 2 days China: The Land Of The Ultra-Rich
  • 3 days Alibaba Soars On Reports Of China Listing
  • 3 days What Killed Toys ‘R’ Us?
  • 3 days SEC And IRS Take An Aggressive Stance On Cryptocurrencies
  • 3 days Bears And Bulls Face Off In Gold Markets
  • 3 days Bitcoin Is Winning Over The Housing Market
  • 3 days Markets Slide Sideways As Trade War Fears Linger
  • 3 days Why Aren’t Millennials Investing?
  • 3 days Bitcoin And Banking: The Next Mobile Payment Revolution
  • 4 days SEC Cracks Down On Silicon Valley’s “Disruptive Tech”
Elliott Wave International

Elliott Wave International

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…

More Info

Why Stock Market Investors Should Expect the Unexpected

Read our forecast for a market rally in the wake of Brexit

[Editor's Note: The text version of the story is below.]

Investors who jump on "sure things" in the stock market usually lick their wounds with regret.

The decision of British voters to leave the European Union appeared to represent low-hanging fruit to short sellers.

After the June 23 vote, the Dow plummeted 610 points on June 24 and tumbled another 261 points the next trading session on June 27.

Even professional investors thought the stock market pain would persist. A June 27 Wall Street Journal article focused on Brexit:

"This is likely to be a fairly prolonged process that unfortunately is going to be a bit of a messy negotiation -- that's not great for asset "said [a] portfolio manager at Fidelity Investments.

But, contrary to popular belief, we've observed that events -- even historical ones like Britain's decision to leave the EU -- do not govern the market's trend. Instead, the market's price pattern unfolds according to the Wave Principle, which provides a detailed model for how investors behave.

Based on the Wave Principle, our June 29 Short Term Update said:

Monday's [June 27] low marks the end of the pullback from the April-June highs in the Dow and S&P 500. The next Minor-degree advance is starting ... .

The next day, June 30, the Dow ended the session up 235 points, which carried the index to its fifth straight higher monthly close.

Later that evening, a CNBC headline quoted one of its well-known hosts:

This rally wasn't supposed to happen

The article goes on to say:

Suddenly out of nowhere -- after a Brexit was supposed to create a disaster in the stock market -- acquirers came out of the woodwork to spend billions to buy other companies, which crushed the short-sellers.

Indeed, July 1 was another positive day for the Dow with the senior index closing up 19.

Elliott wave-minded investors have learned to expect what takes the majority of investors by surprise.

The July Elliott Wave Financial Forecast says:

The coming month could be a big one for the stock market.


Elliott Wave Crash Course

Learn the Why, What and How of Elliott Wave Analysis

Financial media use news and economic events to explain market moves. Steer clear of this misguided approach. Learn what really moves the markets with The Elliott Wave Crash Course.

In this series of three FREE videos, Senior Tutorial Instructor Wayne Gorman demolishes the widely held notion that news drives the markets. Each video will provide a basis for using Elliott wave analysis in your own trading and investing decisions.

Access your free Elliott Wave Crash Course now

This article was syndicated by Elliott Wave International and was originally published under the headline Why Stock Market Investors Should Expect the Unexpected. 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.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter