Bob Prechter – “Step aside” from long positions

By Prieur du Plessis, on August 12th, 2009 posted in: Investment, Markets, Money

I yesterday published a short post on “When will the rally end“, quoting Ned Davis’s indicators. It also makes for interesting reading to consider Bob Precther’s views. Prechter of Elliott Wave International, who is often wrongly described as a permabear, in late February said “cover your shorts” and predicted a sharp rally that would take the S&P into the 1,000 to 1,100 range. With that prediction having come to pass, Prechter is now saying, as reported by Yahoo Finance, Tech Ticker, investors should “step aside” from long positions, and speculators should “start looking at the short side”.

“The big question is whether the rally is over,” Prechter says, suggesting “countertrend moves can be tricky” to predict. But the veteran market watcher is “quite sure the next wave down is going to be larger than what we’ve already experienced,” and take major averages well below their March 2009 lows.

Source: Yahoo Finance, Tech Ticker, August 11, 2009.

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Sergio

August 12, 2009 at 8:18 pm

Robert can be right but can also be wrong. His main reason is that the market had a big rally, it’s not a bad reason but the previous fall was much bigger, so this movement is into margin. Seems that most analysts are looking for a correction, I guess that it will come when they give up.
The fact that he saw this rally coming doesn’t meant he will see the next movement; I guess he fail many times but was not interview. I would like to remind every body that if analyst were infallible they wouldn’t be analyst anymore they would be millionaires.
I also would like to point that the NASDAQ made a clear double bottom that for me is the signal of a new bull market (I did no hear too much about it).
For me a correction is very likely, but a correction.
Sergio can be right but can also be wrong.
Cheers!
Sergio