Elliott wave analysis is an advanced technical analysis tool that spans stock market patterns and general social mood waves. The most outstanding investment newsletter that uses Elliott Wave Theory as its primary forecasting mechanism is the Elliott Wave Financial Forecast produced by the team over at Elliott Wave International (EWI). The good folks at EWI produce short-term market updates (Short Term Update), as well as longer term theoretical discourses (Elliot Wave Theorist). Furthermore, they cover both the currency and the commodity markets, and have special services for short-term traders as well.

R.N. Elliott, back in the 1920's and 30s, developed the notion of a definite pattern in the advancement of the stock market as being three steps forward with two steps back. He calculated the extent of each advance, and also the points where the market would likely retrace its steps. His work proved remarkably accurate during the go-go twenties and during the great stock market crash and subsequent depression years.

His work was picked up by others and developed further, including by Robert Prechter (founder of EWI). In the 1980s, Prechter achieved star status as his forecasts were closely followed and even had the power to move the markets. Prechter's forecasts and outstanding investment newsletter has made a number of subscribers quite wealthy.

Based on his work based on Elliott wave analysis, Robert Prechter has been calling for a bear market of major proportions, and this has caused some of his predictions to go awry. He first expected the bear to start in 1987, then in 1995 and most recently in 2000-01. While, nominally speaking, the stock markets have continued to move forward - it is worth asking the question whether a lot of this move has been made on extraordinarily easy money being made available to the economy. The markets, looking historically, remain richly valued, but continue to march forward. Unlike the 1970s bear market, when the market became deeply undervalued - we have not seen such a phenomenon in any of the bear markets of recent memory. Thus, at a philosophical level, Prechter's instincts and analysis is not entirely off the mark. But of course, philosophy does not pay the bills.

The market has been having a good run since late 2002 and particularly, from early 2003. A new bear market will inevitably set in. At such a juncture, we would strongly urge you to subscribe to the Elliott Wave Financial Forecast and/or the Short Term Update. When the major trend aligns with the Elliott Wave patterns, the results are extraordinarily accurate, and you can make a ton of money using the superb work available in these outstanding investment newsletters.