{"id":28795,"date":"2014-08-09T08:00:51","date_gmt":"2014-08-09T12:00:51","guid":{"rendered":"http:\/\/www.ino.com\/blog\/?p=28795"},"modified":"2014-08-08T13:48:12","modified_gmt":"2014-08-08T17:48:12","slug":"silent-crash-why-the-real-value-of-the-dow-jones-industrials-matters","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2014\/08\/silent-crash-why-the-real-value-of-the-dow-jones-industrials-matters\/","title":{"rendered":"\"Silent Crash\": Why the Real Value of the Dow Jones Industrials Matters"},"content":{"rendered":"

Priced in real value, the Dow has collapsed 84% since 1999 <\/span><\/h3>\n

By Elliott Wave International<\/span><\/h3>\n

Stock market investors who glance at their screens see the dollar<\/strong> value of the Dow Industrials.<\/p>\n

Another way -- the way Elliott Wave International (EWI) prefers -- is real<\/em> value, in terms of the things you can actually buy with your Dow shares, such as real money (gold) or a basket of commodities.<\/p>\n

Clearly, one could ask: \"Why is the Dow priced in real value important? I buy things with dollars.\"<\/p>\n

Let's look briefly at the nominal (dollar valued) Dow vs. the real Dow. Then we can address why the Dow measured in real value matters.<\/p>\n

On July 16, the nominal Dow reached an all-time closing high of 17,138.20.<\/p>\n

\"The value of the real Dow is not even close. Indeed, you may be in for a shock. The Dow priced in real money-gold-topped in 1999 and has collapsed 84% since then ... . Had the U.S. maintained honest money, the Dow would be priced at 266 today ... .\"<\/em><\/p>\n

The Elliott Wave Theorist<\/em>, June 2014<\/p>\n

Robert Prechter, founder and president of EWI, calls the collapse in the real value the \"Silent Crash.\"<\/p>\n

The December 2006 Elliott Wave Theorist<\/em> explains why the value of the real Dow matters. Take a look at this chart [updated in July 2008] and read the commentary:<\/p>\n

\n

\"\"<\/p>\n

What happens when a market declines in real terms but not in dollar terms? We have one really good example of when it happened in the past, and [above] is a picture of what was going on back in the early '70s. If you recall, from the 1970 low to the peak in January of 1973, the Dow made a new all-time high. It went above the old high of 996 and got to 1051 on a closing basis. ... There was a lot of optimism, just as there is today.<\/p>\n

But if you look at this blue line, you will see that the real value of stocks was falling during the end of that rally, and falling from a higher point way back in 1966-68. So you had declining values in real terms ... with rising values in nominal terms.<\/p>\n

How did it resolve? It resolved with a collapse from January 1973 to December 1974, a 47 percent decline in the Dow, 49 percent on the S&P. In other words, the nominal prices played catch-up with the plunging prices in real terms.<\/p>\n

The Elliott Wave Theorist<\/em>, December 2006<\/p>\n<\/blockquote>\n

The set-up today is much bigger<\/strong>.<\/p>\n

Prepare now for what EWI sees ahead by reading a special report for investors just like you, titled, \"The Nominal Dow: The Biggest Lie in Stock Market History.\" This must-read report is 100% free. See below for more details.<\/p>\n

\n\n\n\n
\n

The Biggest Lie in Stock Market History - REVEALED!<\/h3>\n

There's a Silent Crash going on in the stock market right now that most investors don't know about -- but they soon will. Safeguard your portfolio now before it's too late.<\/p>\n

As Robert Prechter says, \"Bear markets always bring constricted time frames and breathtaking movements. You have to be ready for them.\"<\/p>\n

Click here to read the report now and be ready - it's FREE!<\/a><\/h3>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Priced in real value, the Dow has collapsed 84% since 1999 By Elliott Wave International Stock market investors who glance at their screens see the dollar value of the Dow Industrials. Another way -- the way Elliott Wave International (EWI) prefers -- is real value, in terms of the things you can actually buy with […]<\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[6249,6590,5671,6591,6579],"class_list":["post-28795","post","type-post","status-publish","format-standard","hentry","category-general","tag-dow-indexdji","tag-elliott-wave-international-ewi","tag-robert-prechter","tag-silent-crash","tag-the-elliott-wave-theorist"],"yoast_head":"\n"Silent Crash": Why the Real Value of the Dow Jones Industrials Matters - INO.com Trader's Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2014\/08\/silent-crash-why-the-real-value-of-the-dow-jones-industrials-matters\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\""Silent Crash": Why the Real Value of the Dow Jones Industrials Matters - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"Priced in real value, the Dow has collapsed 84% since 1999 By Elliott Wave International Stock market investors who glance at their screens see the dollar value of the Dow Industrials. 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