{"id":128492,"date":"2018-06-14T14:35:14","date_gmt":"2018-06-14T18:35:14","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=128492"},"modified":"2018-06-14T11:10:11","modified_gmt":"2018-06-14T15:10:11","slug":"is-this-a-big-sign-of-a-big-stock-market-turn","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/06\/is-this-a-big-sign-of-a-big-stock-market-turn\/","title":{"rendered":"Is This a Big Sign of a Big Stock Market Turn?"},"content":{"rendered":"
June 14, 2018<\/div>
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Financial legislation might mean something different than most investors believes it means<\/h3>\n

By Elliott Wave International<\/strong><\/p>\n

A stock market warning has just developed for those who are bullish.<\/p>\n

Here’s what I’m talking about (CNBC, May 22):<\/p>\n

The House voted May 22 to pass the biggest rollback of financial regulations since the global financial crisis.<\/p>\n

In a nutshell, lawmakers want to get rid of onerous rules that have been placed on small and medium banks as part of Dodd-Frank, the law that was passed in 2010 to prevent another financial meltdown.<\/p>\n

One might ask, “Why should bullish investors see this as a red flag? Isn’t the loosening of financial regulations a positive for the stock market?”<\/p>

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Well, EWI has, indeed, observed a correlation between financial legislation and the stock market, but it’s probably not what most investors expect.<\/p>\n

Financial history shows that financial legislation tends to follow the stock market, not the other way around. Put another way, financial regulators implement reforms\u00a0after\u00a0<\/strong>busts and later turn optimistic and repeal or relax financial regulations\u00a0after\u00a0<\/strong>booms.<\/p>\n

Besides Dodd-Frank, a historic example is Glass-Steagall, the first major federal legislation to separate commercial and investment banking. This law was enacted\u00a0after<\/strong>\u00a0the bottom of the 1929-1932 stock market crash.<\/p>\n

The December 2013 issue of the monthly publication,\u00a0The Socionomist<\/em>, showed this chart and said:<\/p>\n

\"SocialMoodFinancialReg\"<\/p>\n

In 1933, Congress passed laws designed to prevent the crash that had already happened. In 1999, Congress passed laws designed to encourage the rally that had already happened.<\/p>\n

Notably, the stock market rallied after Glass-Steagall passed, and then some 66-years later, plummeted shortly after the law was repealed.<\/p>\n

Yes, the government is usually the last group to act on a trend. If technical indicators are also pointing to a reversal, investors would do well to position their portfolios accordingly.<\/p>\n

So happens, EWI’s analysts are saying that many of the market’s technical indicators are suggesting a\u00a0major acceleration<\/strong>\u00a0in the DJIA’s current Elliott wave price pattern.<\/p>\n

We just released this new, free report,\u00a05 ‘Tells’ that the Markets Are About to Reverse<\/strong><\/a>, that reveals many false indicators \u2013 a.k.a. “head fakes” — investors see every day. The report helps readers separate themselves from the herd and survive (and thrive) in volatile markets.\u00a0Read the free report now.<\/strong><\/a><\/p>\n

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This article was syndicated by Elliott Wave International and was originally published under the headline\u00a0Is This a Big Sign of a Big Stock Market Turn?<\/strong><\/a>. 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.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Financial legislation might mean something different than most investors believes it means By Elliott Wave International A stock market warning has just developed for those who are bullish. Here’s what I’m talking about (CNBC, May 22): The House voted May 22 to pass the biggest rollback of financial regulations since the global financial crisis. In […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-128492","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/128492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=128492"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/128492\/revisions"}],"predecessor-version":[{"id":128494,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/128492\/revisions\/128494"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=128492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=128492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=128492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}