Elliot Wave predicts triple-digit Dow in 2016 (If you think things are bad now....)

Marketwatch ^ | 06/17/2010 | Peter Brimelow

[SeekAndFind]

An investment letter that called the Crash of 2008 said that this would be a bad year -- and it now says it will get worse.

A whole generation of investors think that Robert Prechter and his Elliott Wave Theory letters, Elliott Wave Financial Forecasts and Elliott Wave Theorist, are permabears. And they've certainly seemed that way for the last decade -- although it should be noted that the stock market is now roughly back where it started. ( See April 26, 2002 column. )

But Prechter was very bullish after the 1974 low and, briefly, after being one of the very few services to make money in 2008. Then he announced that "2010 is the year when the bear market in stocks returns in full force." ( See Jan. 22 column. )

Elliott Wave Financial Forecasts (EWFF) makes recommendations specific enough to be tracked by the Hulbert Financial Digest. (The Elliott Wave Theorist is too, well, theoretical.)

Over the year to date, EWFF is up just 0.4% by Hulbert Financial Digest count through May vs. negative 0.3% for the dividend-reinvested Wilshire 5000 Total Stock Market Index.

Over the past 12 months, its bearishness did cause it to gain just 4.75% compared to 22.89% for the total return Wilshire 5000. But over the past three years, the letter's bearishness paid off handsomely. It's up an annualized 5.25% against negative 8.12% annualized for the total return Wilshire 5000.

And even over the past 10 years, so badly damaged have stocks been that the letter was up an annualized 1.05%, outperforming a mere 0.22% annualized gain for the Wilshire 5000.

The EWFF issue published in early May said flatly: "The topping process is over for the countertrend rally that started in the first quarter of 2009.

[TopQuark]

Robert Prechter has successfully predicted 20 of the last 3 declines in the market. Unfortunately, he may be correct this time, as the markets continue to discount the onset of socialism in America.

[downwdims]

Well, If everyone is Bearish then stuff is on sale for sure.

[surfer]

Prechter has been wrong before...especially on the short-game however it is almost impossible to predict.

He is in the ballpark on where this is all going. Just the debt situation alone coupled with the global economic turmoil is going to create a massive down turn in the markets - even the games they are playing now are going to run out of steam.

It is startling how similar the effects we are seeing now mimic those of the FDR period and the markets, their fundamentals during 1929-1953...

[bert]

My view is that while gold is good, other assets are also good. Real estate is one, stocks are another. A good Gold stock mutual fund is in my view best.

Financial assets tied to the currency will suffer.

When in school I was taught that stocks are a hedge against inflation. That has not bee true in the recent past where we had stag flation. When the economy moved the lagging stocks boomed.

The rise of worry seems to me to be about earnings with an inflation fear component.

That is Y = e/p(I) + (G*I) + (in*I)
Where:

Y = yield
e = earnings
p = per share price
I = investment
G = growth
In = inflation

[safetysign]

This is the change that Obama promised.

[Freddd]

‘although it should be noted that the stock market is now roughly back where it started.’

Ten Thousand is not Fourteen Thousand, and shuffling things around by government to make it ‘appear’ it’s at Ten thousand is a far cry from investors actually investing and making the trades and numbers move through legitimate trading.