{"id":32220,"date":"2015-03-04T15:43:36","date_gmt":"2015-03-04T20:43:36","guid":{"rendered":"http:\/\/www.ino.com\/blog\/?p=32220"},"modified":"2015-03-04T15:43:36","modified_gmt":"2015-03-04T20:43:36","slug":"heres-what-stock-market-bulls-might-be-overlooking","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2015\/03\/heres-what-stock-market-bulls-might-be-overlooking\/","title":{"rendered":"Here's What Stock Market Bulls Might Be Overlooking"},"content":{"rendered":"<p><strong>By:Elliott Wave International<\/strong><\/p>\n<p>On Friday (Feb. 27), the 4th quarter U.S. GDP was revised downward to 2.2% from the original 2.6%.<\/p>\n<p>\"U.S. stock markets shrugged off the revision,\" wrote Fox Business. And why wouldn't they -- after all, the conventional wisdom says that as long as the economy is growing, so is the stock market.<\/p>\n<p><em>Except, it's not exactly true.<\/em><\/p>\n<p>See, if that notion were true, then you'd have to assume that the U.S. economy was in a bad shape in 2007, when the stock market began its biggest decline since the Great Depression. But the facts show the opposite.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"\/\/www.elliottwave.com\/images\/freeupdates\/image\/mw%2006-26-2014one.GIF\" alt=\"\" width=\"500\" height=\"268\" \/><\/p>\n<p>When the Dow topped in October 2007, key economic measures were indeed strong:<!--more--><\/p>\n<ul>\n<li>In the quarter preceding the market peak, GDP expanded at 2.7%<\/li>\n<li>Unemployment in 2007 was 4.6%<\/li>\n<li>Consumer confidence was very strong, too (top red circle; chart: Bloomberg)<\/li>\n<\/ul>\n<p>If a strong economy means a strong stock market, then stocks should have continued higher. They didn't. The Dow fell more than 50% over the next year and a half:<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"\/\/www.elliottwave.com\/images\/freeupdates\/image\/mw%2006-26-2014twoe.GIF\" alt=\"\" width=\"461\" height=\"476\" \/><\/p>\n<p>If you think that's counterintuitive, then fast forward to early 2009. That's when we saw the opposite economic picture:<\/p>\n<ul>\n<li>Consumer confidence fell to an all-time low (the second red circle on the blue chart)<\/li>\n<li>GDP growth fell to a negative 5.4%<\/li>\n<li>Unemployment rate more than doubled to almost 10%<\/li>\n<\/ul>\n<p>Because of such terrible economic data, few mainstream economists were optimistic in early 2009. And yet the stock market bottomed in March of that year.<\/p>\n<p>This reminds me of a quote from our monthly <em>Elliott Wave Theorist<\/em>:<\/p>\n<blockquote><p>\"Suppose you were to possess perfect knowledge that next quarter's GDP will be the strongest rising quarter for a span of 15 years, guaranteed.<\/p>\n<p>\"Would you buy stocks?<\/p>\n<p>\"Had you anticipated precisely this event for 4Q 1987, you would have owned stocks for the biggest stock market crash since 1929.<\/p>\n<p><strong>\"GDP was positive every quarter for 20 straight quarters before the 1987 crash -- and for 10 quarters thereafter.<\/strong><\/p>\n<p>\"But the market crashed anyway.\"<\/p><\/blockquote>\n<hr \/>\n<table class=\"body\" style=\"border: solid 5px #EAEAEA; padding: 10px;\">\n<tbody>\n<tr>\n<td valign=\"top\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=09ino&amp;rcn=aa488&amp;dy=aa030415&amp;url=http:\/\/www.elliottwave.com\/club\/State-of-the-Global-Markets-LG.aspx?code=99998%26articleid=5389\"><img loading=\"lazy\" decoding=\"async\" src=\"\/\/www.elliottwave.com\/images\/club\/web_ads\/7046-pr-globalmarkets.png\" alt=\"State of the Global Markets Report\" width=\"85\" height=\"150\" align=\"left\" border=\"0\" hspace=\"5\" \/><\/a><\/td>\n<td valign=\"top\">\n<h3><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=09ino&amp;rcn=aa488&amp;dy=aa030415&amp;url=http:\/\/www.elliottwave.com\/club\/State-of-the-Global-Markets-LG.aspx?code=99998%26articleid=5389\">Get our FREE <em>State of the Global Markets <\/em>Report -- 2015 Edition<\/a><\/h3>\n<p>We invite you to read our free State of the Global Markets report to learn what's ahead for the U.S., European and Asian-Pacific stock markets.<\/p>\n<p><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=09ino&amp;rcn=aa488&amp;dy=aa030415&amp;url=http:\/\/www.elliottwave.com\/club\/State-of-the-Global-Markets-LG.aspx?code=99998%26articleid=5389\"><strong>Learn how you can get this FREE, 53-page report now &gt;&gt;<\/strong><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>By:Elliott Wave International On Friday (Feb. 27), the 4th quarter U.S. GDP was revised downward to 2.2% from the original 2.6%. \"U.S. stock markets shrugged off the revision,\" wrote Fox Business. And why wouldn't they -- after all, the conventional wisdom says that as long as the economy is growing, so is the stock market. [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/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":[6590,5670,5050,7335],"class_list":["post-32220","post","type-post","status-publish","format-standard","hentry","category-general","tag-elliott-wave-international-ewi","tag-elliott-wave-theorist","tag-u-s-economy","tag-u-s-gdp"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here&#039;s What Stock Market Bulls Might Be Overlooking - INO.com Trader&#039;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\/2015\/03\/heres-what-stock-market-bulls-might-be-overlooking\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Here&#039;s What Stock Market Bulls Might Be Overlooking - INO.com Trader&#039;s Blog\" \/>\n<meta property=\"og:description\" content=\"By:Elliott Wave International On Friday (Feb. 27), the 4th quarter U.S. GDP was revised downward to 2.2% from the original 2.6%. &quot;U.S. stock markets shrugged off the revision,&quot; wrote Fox Business. 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