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Just the idea of NASDAQ and New York Stock Exchange initial public offerings helped turn the market in early 2000. The proposed offering fell away with the onset of the bear market in 2000, but The Elliott Wave Financial Forecast was able to use their announcements to help identify the peak (for the full quote see the Additional References below). Over the course of the current rally, most of the major exchanges have actually managed to go public, but not without intensifying the competitive pressures that EWFF talked about as the bearish counterpoints to the euphoria surrounding proposed exchange IPOs in 1999. Now that most of the exchanges have been handed off to the public, the article at left illustrates how those pressures are starting manifest themselves. In recent days, The New York Stock Exchange bounced back to slightly above its IPO price, but its gain come at the expense of the Deutsche Boerse, Euronext and the London Stock Exchange. The enormous belief in the long-term viability of financial exchange has also sparked the creation of the Citi/Goldman Sachs/Morgan Stanley consortium discussed in the article. The Chicago Mercantile Exchange’s merger with the Chicago Board of Trade pushed its share prices to a new high in October, but it has has since failed to confirm the new highs in the major averages. The spike high shown in the Socio Times entry of October 17 remains its peak.

But the stiff competition and technological arms race within the exchange industry  will probably end up as sidebars. The big story is the unfolding financial storm which should be followed by a long,  trading hiatus on the part of most speculators. Unlike the competitive pressures, these forces will  take the exchange community by complete surprise. Today's hit on the European bourses is probably just the first of many. In second half of the 2000s, pain will become the dominant commodity of financial exchanges everywhere.  

July 1999, EWFF
The stock market itself is going public. The New York Stock Exchange announced that it will abandon its 207-year-old seat membership system and go public. The move came days after a consortium of brokerage firms decided effectively to establish its own electronic exchange and weeks after the NASDAQ revealed its own IPO plan. Of the NASDAQ plan [to go public], the NY Times had this to say: “On its face, it’s hard to imagine a less appealing investment: a cyclical, capital-intensive business, rapidly losing market share to newer, more nimble competitors not subject to its strict federal regulation.” A NASDAQ official even cited the “mood of urgency” to bring the deal forward. Still, the Times concluded, “It could become one of the most intriguing investment opportunities of the next decade.” The reason is the “magic” of the market itself: “The idea of a NASDAQ IPO has generated excitement, much of which can be traced to the financial reward that attaches itself to those three magic letters.” Would a newspaper have written such a thing at the bottoms in 1974 or 1982?