This is the ideal accompaniment to the “across-the-board reversal” called for in the Special Section of this month’s issue of The Elliott Wave Financial Forecast. The emphasis on inflation suggests that our forecast is right on track. An inflation scare is the perfect set up because it shows that people’s attention is turned 180-degrees from the deflationary forces that are actually driving the reversal in our “all-the-same-market” scenario. While the fear of inflation is probably higher than it’s been in decades, the chart from the front page of yesterday’s Wall Street Journal shows that CPI is actually rising at a rate that is still well below the level in 2001. It’s also below its level in early 2005. So, the spike high in inflation fear is the opposite of concern over deflation in late 2002 and early 2003, which is when "all-the-same-markets" turned higher in unison.
We’ll talk about this more in the June issue, which comes out next Friday. Meanwhile, enjoy the fireworks!
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