{"id":17786,"date":"2011-01-07T13:37:59","date_gmt":"2011-01-07T18:37:59","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=17786"},"modified":"2011-01-07T13:37:59","modified_gmt":"2011-01-07T18:37:59","slug":"earnings-drive-stock-prices-see-this-chart-before-you-answer","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/01\/07\/earnings-drive-stock-prices-see-this-chart-before-you-answer\/","title":{"rendered":"Earnings Drive Stock Prices? See This Chart Before You Answer"},"content":{"rendered":"<h3><span style=\"font-size: small;\">A free Club EWI report  exposes the TEN most misleading myths of Wall Street, including this  one: &#8220;Earnings drive the stock market.&#8221; <\/span><br \/>\n<span style=\"font-size: small;\"> <\/span><\/h3>\n<h3><span style=\"font-size: small;\">By Elliott Wave International<\/span><\/h3>\n<p>Since the time of buttonwood trees, Wall Street has had its                   own version of the Ten Commandments &#8212; the cornerstone principles                   of conventional economic wisdom. The first of these writ-in-stone                   notions is the widespread belief that <strong><span style=\"text-decoration: underline;\">earnings<\/span><\/strong><span style=\"text-decoration: underline;\"> <strong>drive<\/strong> <strong>the                   stock market<\/strong><\/span>.<\/p>\n<p>By this line of reasoning, knowing where a market&#8217;s prices                   will trend next is simply a matter of knowing how the companies                   that comprise said market are expected to perform. On this,                   the recent news items below capture the public&#8217;s devoted following                   of earnings data:<\/p>\n<ul type=\"disc\">\n<li><em>&#8220;Stocks Rebound As Investors Await Earnings.&#8221; <\/em>(Associated                     Press)<\/li>\n<li><em>&#8220;US Stocks Drop As Earnings Data Fall Short&#8221; <\/em>(MarketWatch)<\/li>\n<li><em>&#8220;Sideways Market Looks For Direction: Earnings                       Could Point The Way&#8221; <\/em>(MarketWatch)<\/li>\n<\/ul>\n<p>In reality, though, much of this belief is based on <em>faith, <\/em>not <em>facts. <\/em>While                   earnings may play a role in the price of an individual stock,                   the stock market as a whole marches to a different drummer.<\/p>\n<p>You get this ground-breaking revelation in the FREE report                   from Club Elliott Wave International (Club EWI, for short)                   titled <span style=\"text-decoration: underline;\"><em><strong><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa160&amp;dy=aa010611&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1962\">&#8220;Market                   Myths Exposed.&#8221;<\/a><\/strong><\/em> <\/span>In Chapter One, our                   editors shatter the smoke-screen surrounding the widespread                   notion that &#8220;Earnings Drive Stock Prices&#8221; with these                   enlightening insights:<\/p>\n<ul type=\"disc\">\n<li>&#8220;Quarterly earnings reports announce a company&#8217;s achievements                     from the previous quarter. Trying to predict futures prices                     movements based on what happened three months ago is akin                     to driving down the highway looking only in the rearview                     mirror. It leaves investors eating the markets dust when                     the trend changes.&#8221;<\/li>\n<li>And &#8212; There is no consistent correlation between upbeat                     earnings and an uptrend in stock prices; or vice a versa,                     downbeat earnings and a decline in stocks. Case in point:                     During the 1973-4 bear market, the S&amp;P 500 plummeted                     50% while S&amp;P earnings rose every quarter over that period.                     Here, <span style=\"text-decoration: underline;\"><strong><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa160&amp;dy=aa010611&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1962\"><em>&#8220;Market                     Myths Exposed&#8221;<\/em><\/a><\/strong><\/span> provides                     the following, visual reinforcement: A chart of the S&amp;P                     500 versus S&amp;P 500 Quarterly Earnings since 1998.<\/li>\n<\/ul>\n<p><img decoding=\"async\" src=\"http:\/\/www.elliottwave.com\/images\/freeupdates\/S&amp;Pearnings.gif\" border=\"0\" alt=\"Earnings: Yesterday News\" \/><\/p>\n<p>As you can see, the market enjoyed record quarterly earnings                     right alongside the historic, bear market turn in stocks                     in 2000. Then again, the first negative quarter ever in 2009                     preceded the March 2009 bottom in stocks.<\/p>\n<p><em><strong><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa160&amp;dy=aa010611&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1962\">&#8220;Market                         Myths Exposed&#8221;<\/a><\/strong><\/em> dispels the top                         TEN fallacies of mainstream economic thought. The misconception                         that &#8220;Earnings Drive the Stock Market&#8221; is number                         one. The remaining nine are equally capable of knocking                         your socks off and most importantly, helping you protect                         your financial future.<\/p>\n<p><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa160&amp;dy=aa010611&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1962\"><span style=\"text-decoration: underline;\"><strong>Get                           the 33-page Market Myths Exposed eBook for FREE<\/strong><\/span><strong><span style=\"text-decoration: underline;\"><br \/>\n<\/span><\/strong><\/a>Learn why you should think independently rather                   than relying on misleading investment commentary and advice                   that passes as common wisdom. Just like the myth that government                   intervention can stop a stock market crash, Market Myths Exposed                   uncovers other important myths about diversifying your portfolio,                   the safety of your bank deposits, earnings reports, inflation                   and deflation, and more! Protect your financial future and                   change the way you view your investments forever! Learn more, <a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=susan&amp;rcn=aa142&amp;dy=aa102910&amp;url=\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1804\">and                   get your free eBook here<\/a>.<\/p>\n<div>\n<p><em>This                     article was syndicated by Elliott Wave International and                     was originally published under the headline <a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa160&amp;dy=aa010611&amp;url=http:\/\/www.elliottwave.com\/freeupdates\/archives\/2011\/01\/06\/Earnings-Drive-Stock-Prices-See-This-Chart-Before-You-Answer-.aspx%26articleid=1962\"><strong>Earnings Drive Stock Prices? See This Chart Before You Answer<\/strong><\/a>.                     EWI is the world&#8217;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":"<p>In reality, though, much of this belief is based on faith, not facts. While earnings may play a role in the price of an individual stock, the stock market as a whole marches to a different drummer.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-17786","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/17786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=17786"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/17786\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=17786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=17786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=17786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}