The consensus opinion is usually right, or so we're told. That's why a simple majority can win an election; the underlying assumption is that the majority of people will select the best candidate. But should you trust consensus opinion in finance?
Let's look at a real-world example. Last year was miserable for Indian markets: The S&P Nifty fell 25%, making it one of the worst-performing benchmark indexes. And the consensus opinion at the end of the year was that the losses would continue.
After closing at a 25-month low, equities had opened the day down hard again. The broadcasters described the "horror week" in India's markets and noted "there is fear right now and ... clearly a bit of panic." Moreover, that day's biggest story was that a prominent bull on India had thrown in the towel. In short, the overwhelming consensus was that markets would continue their downward march.
Yet, when Galasiewski (pronounced 'gala-shev-ski') went on air, he had a vastly different message: "I really think there's a low approaching.... I'm quite optimistic, actually."
(Editor's Note: You can watch Galasiewski's Dec. 18 interview below.)
How could he be optimistic and bullish when virtually everyone else -- the mainstream media and financial experts included -- believed that the market would fall further?
Because our analysts at EWI don't follow the consensus opinion, as loud and persuasive as it might be. Instead, they apply the Elliott Wave Principle's insight that markets are patterned and predictable, and they support their analysis with technical indicators and measures of social mood. These ingredients produce truly independent -- and sometimes radical -- forecasts.
Flash back again to December 18. A crystal-clear Elliott Wave pattern -- with specific
bullish implications -- was screaming at Galasiewski. Here's how he describes his forecast in the January 2012
Asian-Pacific Financial Forecast (emphasis added):
"On the broadcast, I showed the triple zigzag corrective pattern.… My EWI colleague Jeffrey Kennedy has observed that corrective waves sometimes trend within channel lines just as impulse waves do, and the decline in the Nifty since the 2010 high conforms to that guideline. It is also falling to new lows on a momentum divergence, which is typical of the final wave of a decline."
Galasiewski's bullish forecast wasn't just accurate; it was spot-on. The Nifty bottomed two days later -- and then surged 22 percent, as you can see in the chart below.
Of course, the Wave Principle is about probabilities, not certainties. But you can see how practical and actionable Elliott wave analysis can be -- even in the face of an overwhelming consensus.
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Who do you trust for your market analysis? Don’t get lost in the crowd. Get a truly forward-thinking, independent view that doesn't blindly follow the herd, but studies the objective Elliott wave patterns.
The February Asian-Pacific Financial Forecast tells you what might be next for India, and it separates the bulls from the bears in Asia with specific forecasts and analysis for Japan, China, Australia, Singapore, Hong Kong and more. Put it on your screen in minutes, completely risk-free for 30 days.
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