You know I don't think much of Economists. They can tell you what the supply/demand of a piece of corn is at a moment perhaps, but they do ZERO for predicting social mood. And social mood (sentiment) is the driving force of economies.
(hat tip: SRS Player for the article link)
Good mood = heightened economic activity
Bad mood = recessed economic activity
Its pretty much that simple. Elliott Waves attempts to track these recognizable sentiment swings in social mood that seems to be ingrained into our very genetic fabric. The stock market is the "gauge" or indicator.
Primary Wave 2 (P2) is correcting a very large drop in social mood that occurred over the span of 17 months. Seeing stories like this only increase the likelihood that P2 is indeed doing its job and doing it well (shake out the bearish mood). This initial bullishness of economists is to be expected after the market has risen over 30% in over 2 months. What would you expect? Economists are not Elliott Wavers. The "bottom" will be in when 5 Primary-sized impulse waves play out in full. That is the theory on where we are in the larger picture. And wave 3's are usually always the strongest. We have yet to see the most scariest times....
The fact that this story comes out near the top of the first major leg of P2, is only fitting. A corrective in social mood and prices and then another bullish ABC advance of some sort will only cement feelings of bullishness and hope. The market is not there yet. At 1000 SPX, they will say even better things about the outlook of the economy. At the top of P2, a plurality will likely determine the bottom was definitely in March of 2009 and that its "all clear".
OK so what "sparks" P3? Well, it could be anything. Once P2's mood tops, perhaps there will be a singular event that easily "explains" a subsequent p3 wave. And many will believe it. Perhaps a war of some sort or some "incident". It won't really matter.
I re-read this story and I find NOTHING on WHY the economy will start to stabilize. Its full of hope yes, but the story provides nothing in facts other than that they did a survey of some guys and they were in an upswing mood so they gave a decent, (yet hedged of course) economic outlook. Incidentally economists TRACK sentiment such as consumer sentiment yet they do not make the leap of Elliott Wave Theory behind it all. They track sentiment and surveys of all kinds! But again, they never make that solid connection....hence they are merely subservient to the sentiment that they track! When everyone is feeling good, THEY feel good, and make rosier predictions.
Look it up. Look up all the "predictions" for 2008 and almost NONE got it right. Some were so way off base you wonder why they still can keep the "job" of being an economist.
Sure the economic numbers will give "pause" and some will suggest things are getting better but that is to be expected! "Numbers" do not go down in a straight line either!
Personally I think P3 shows the path to a dire outlook in social mood. Enjoy P2 while it lasts.
Many did not believe in the theory of Elliott Waves yet we predicted P2 was coming and that there would be a nice rally wave and that "good tidings" will come. Indeed it has. But eventually when you are at the top, there is nowhere to go but down.
Look, Economists cannot go out on a limb. They won't be invited to play in reindeer games if they do.
I'll give you a prediction: Primary Wave 3 will cause the market to explode on several instances to the downside. Circuit breakers. And then you'll lose more freedom because government will take a bit more away. Fascism and world wars reigns at the bottom of nasty social mood corrective swing periods. Sometimes this results in a Dark Age when they are at the millennial wave level.