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 ...
The global warming theory applied to the stock market
Instead of taking profits, producers and management organizations are cutting prices.
The market will not grow without profits behind it.
I’m disappointed. I thought Prechter based his analyses on economics fundamentals, not fractal patterns in the charts.
For someone described as being “in a different league” Prechter is full of a lot of BS.
“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!
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.
I have been out of the stock market for 2 1/2 years now and I sleep well at night.
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.
Typo - current P/E on the S&P is 22.
Typo - current P/E on the S&P is 22.
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.
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!
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.
“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.
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...
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.
1000... Not very likely anytime soon.
But if so, then Obama won’t make it thru his first term.
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