European Debt Crisis:

Portugal’s Bailout, One Year Later — Were You Prepared in Advance?

Many analysts had opinions before the bailout, but no one was talking about the most important indicator

Make no mistake: The stakes for financial and economic survival in Europe are high. Seemingly everyone — from investment bloggers to financial television hosts — has something to say about the European debt crisis.

But with so many divergent opinions to choose from, which ones should you trust?

That’s where Elliott Wave International’s global-market analysis team comes in. Our analysts cut through the noise of endless talking heads with an independent perspective. By focusing on objective Elliott waves and other technical indicators, they equip you to stay one step ahead of Europe’s financial turmoil.

Case in point: Just over one year ago in late March 2011, mainstream analysts conjectured about the probability of a Portuguese bailout. Many people had opinions, but no one was talking about the most important indicator, namely that Portugal’s borrowing costs had just crossed a critical threshold. No one, that is, except EWI European market analyst Brian Whitmer.

Here’s what he told his readers in the April 1, 2011, Global Market Perspective (emphasis added):

Observe the horizontal line on this chart of 10-year borrowing costs in Greece, Ireland and Portugal. It’s no magic number, but 8% seems to be the proverbial straw that breaks the camel’s back. As the arrow on the left shows, Greek authorities activated their bailout package on April 23, 2010, two days after 10-year yields crossed 8%. In Ireland, bond yields surpassed 8% on November 10, 2010, and Irish authorities activated their bailout the following week. Mark your calendar, because Portuguese yields made the treacherous crossing two days ago. The implication is that the continent’s third sovereign bailout in less than a year has become a near certainty.

A “near certainty,” indeed. Just five days after Whitmer published this analysis, Portugal’s government officially requested a bailout, and, one month later, it got one.

You see, EWI’s global analysts like Whitmer don’t follow the talking heads nor do they rely on fundamentals — both of which can be misleading. Instead, they examine objective evidence and charts — like this one — to deliver crystal-clear, forward-thinking analysis.

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