Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

A Market Forecast That Says ‘Take Cover’ (Robert Prechter: Dow To 1,000)
The New York Times ^ | 7-6-2010 | JEFF SOMMER

Posted on 07/06/2010 7:26:12 PM PDT by blam

A Market Forecast That Says ‘Take Cover’

By JEFF SOMMER
Published: July 2, 2010

WITH the stock market lurching again, plenty of investors are nervous, and some are downright bearish. Then there’s Robert Prechter, the market forecaster and social theorist, who is in another league entirely.

Tami Chappell, The New York Times. If Robert Prechter is right, one market analyst said, “we’ve basically got to go to the mountains with a gun and some soup cans.”

Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years.

In a series of phone conversations and e-mail exchanges last week, he said that no other forecaster was likely to accept his reasoning, which is based on his version of the Elliott Wave theory — a technical approach to market analysis that he embraces with evangelical fervor.

Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and ’40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

His advice: individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come.

[snip[

Buy-and-hold stock investors will be devastated in a crash much worse than the declines of 2008 and early 2009 or the worst years of the Great Depression or the Panic of 1873, he predicted.

[snip]

(Excerpt) Read more at nytimes.com ...


TOPICS: News/Current Events
KEYWORDS: dow; markets; prechter; stocks
Navigation: use the links below to view more comments.
first 1-2021-37 next last

1 posted on 07/06/2010 7:26:18 PM PDT by blam
[ Post Reply | Private Reply | View Replies]

To: blam
“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

The global warming theory applied to the stock market

2 posted on 07/06/2010 7:30:54 PM PDT by Perdogg (Nancy Pelosi did more damage to America on 03/21 than Al Qaeda did on 09/11)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam
So far we've faced what is essentially a 5% drop in GDP combined with a doubling of unemployment, and our industrial sector is rapidly becoming the world's lowest cost producer in a number of very critical product lines with world impact.

Instead of taking profits, producers and management organizations are cutting prices.

The market will not grow without profits behind it.

3 posted on 07/06/2010 7:31:12 PM PDT by muawiyah
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

I’m disappointed. I thought Prechter based his analyses on economics fundamentals, not fractal patterns in the charts.


4 posted on 07/06/2010 7:34:53 PM PDT by Nervous Tick (Eat more spinach! Make Green Jobs for America!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam
The markets will go down but there is no way the DOW would go to 1000, may be 6000-7000 in worst case scenario. It will be the end US and the World economy as we know it if the DOW goes to 1000. It would not be allowed to happen no matter what. There are still much powerful forces than Obama and his socialists and these forces would not allow this to happen.
5 posted on 07/06/2010 7:37:05 PM PDT by jveritas (God bless our brave troops)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

For someone described as being “in a different league” Prechter is full of a lot of BS.


6 posted on 07/06/2010 7:37:22 PM PDT by Sarajevo (You're jealous because the voices only talk to me.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Nervous Tick

“His advice: individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come.”

He’s right!


7 posted on 07/06/2010 7:40:05 PM PDT by EnglishOnly (Fight all out to win OR get out now.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Nervous Tick

Elliott Wave is not fractal analysis, despite what the article might say, although fractals make their presence known in the 5-3 wave cycles. Sort of as in nature, fractals show up all over the place (very obvious in shell patterns, etc.), but the study of zoology is called zoology not fractals.


8 posted on 07/06/2010 7:40:16 PM PDT by steve86 (Acerbic by nature, not nurture)
[ Post Reply | Private Reply | To 4 | View Replies]

To: EnglishOnly
“His advice: individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come.” He’s right!

I have been out of the stock market for 2 1/2 years now and I sleep well at night.

9 posted on 07/06/2010 7:44:08 PM PDT by Slyfox
[ Post Reply | Private Reply | To 7 | View Replies]

To: jveritas

The current P/C on the S&P 500 is 22. It usually drops to 6 in a serious recession. That would take it down to about 2700. Other Elliott Wave people who called 2008 to within 100 points on the Dow are calling for about 3,600.

A lot of people in 1931 were probably saying things will get better and O is worse than socialist FDR.

You have mu*lims running NASA now. Did you ever expect that? It was very good when the Germans ran it.


10 posted on 07/06/2010 7:44:15 PM PDT by Frantzie (Democrats = Party of I*lam)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Frantzie

Typo - current P/E on the S&P is 22.


11 posted on 07/06/2010 7:47:29 PM PDT by Frantzie (Democrats = Party of I*lam)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Frantzie

Typo - current P/E on the S&P is 22.


12 posted on 07/06/2010 7:47:34 PM PDT by Frantzie (Democrats = Party of I*lam)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Frantzie

As I said in my earlier post there are still much powerful forces than Obama and his socialists and these forces would not allow this to happen.


13 posted on 07/06/2010 7:48:03 PM PDT by jveritas (God bless our brave troops)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Nervous Tick
Bob Prechter has always been a technician; his analysis in 1980, predicting the rise of the DJIA to 3200+, was a classic.

As Marty Schwartz (one of the most profitable traders in history) has pointed out, Prechter has been waiting for and predicting a disaster since roughly 1988.

One of these days, he'll be correct. Very possibly this year, given that the goobermint are actively conspiring against both anything resembling sound finance and against the few private citizens who are still in the stock markets.

I trust you are aware that more than 50% of the volume on NYSE today -- TODAY -- occurred in just 99 issues, and C and BP were the two share leaders. SPY, of course, led the pack.

Taking any hints from this mkt action? I am, please be assured.

Good trading to you!

14 posted on 07/06/2010 7:48:25 PM PDT by SAJ
[ Post Reply | Private Reply | To 4 | View Replies]

To: blam; xsmommy

The Dow to an ounce of gold ratio is going back to 1.

I was hoping they would meet at 5000 but they could meet at 1000.


15 posted on 07/06/2010 7:50:13 PM PDT by NeoCaveman ("There is no more money. Period. We are BROKE." - Lurker 5/21/10)
[ Post Reply | Private Reply | To 1 | View Replies]

To: jveritas

“It will be the end US and the World economy as we know it if the DOW goes to 1000. It would not be allowed to happen no matter what.”

No, that would be Dow of zero.

Dow 1000 could be caused by nuclear war/terrorism or catastrophic natural disaster.


16 posted on 07/06/2010 7:53:02 PM PDT by devere
[ Post Reply | Private Reply | To 5 | View Replies]

To: jveritas
The markets will go down but there is no way the DOW would go to 1000, may be 6000-7000 in worst case scenario. It will be the end US and the World economy as we know it if the DOW goes to 1000. It would not be allowed to happen no matter what. There are still much powerful forces than Obama and his socialists and these forces would not allow this to happen.

Why? In the GD I stocks lost about 90% of their value - or about the same amount to DOW 1000 today (GD II) despite all the insane FDR government socilaist policies. Life did go on...

17 posted on 07/06/2010 7:54:06 PM PDT by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
[ Post Reply | Private Reply | To 5 | View Replies]

To: blam
Coming Chaos: No Banks, No Public Facilities, No Food and Rampaging Gangs of Desperate People
18 posted on 07/06/2010 7:56:08 PM PDT by blam
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam
His advice: individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come.

Hmmmmm. What could possibly go wrong with that strategy?

I'm even more bearish than the average bear, but I think Dow 1,000 is somewhat less likely than Dow 1,000,000 and $200 Happy Meals.

19 posted on 07/06/2010 7:56:42 PM PDT by Sooth2222 ("Suppose you were an idiot. And suppose you were a member of congress. But I repeat myself." M.Twain)
[ Post Reply | Private Reply | To 1 | View Replies]

To: blam

1000... Not very likely anytime soon.

But if so, then Obama won’t make it thru his first term.


20 posted on 07/06/2010 7:57:54 PM PDT by Brilliant
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-37 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson