Please clarify your question....
Are you working in the Quick or Expert workspace of Premiere Elements 12. On on what computer operating system?
What is the "fading window". And, what are you seeking...the Fade In and Out Video Audio shortcuts or the Fade options in
Applied Effects Tab/Applied Effects Palette/Opacity panel expanded?
Are you applying your effects and then noting what you have in the Edit area monitor. In the screenshot, I have applied
Channel Mixer and looking in the Edit area monitor (where the image is) to view the results when I change the settings
When you import a video into a project, can you see the video part on VIdeo Track 1 before you start to edit the Timeline video?
Are you involved with the Preview Windows instead of the Edit area monitor? Preview Windows to which I refer is the Window that opens
when you double click the Timeline video or the thumbnail for the file in Expert workspace Project Assets.
We look forward to your clarification so that we can help you.
Thank you for the clarification on your situation.
What computer operating system is your Premiere Elements 12 running on? And, have you updated the program to 12.1 using an opened project's Help Menu/Update?
How would you describe you problem
a. It worked before but not now
b. It never worked before?
Is you computer's video card/graphics card up to date according to the web site of the manufacturer of the card? How many video cards/graphic cards does your computer use? Do you work with more than one monitor?
Besides the missing transitions, can you create a title in the program's Titler using Text Menu/New Text/Default Text?
Let us explore those questions and answers, and then we can decide what next.