Bob Prechter: Stocks, commodities topping; dollar set for major rally

By Prieur du Plessis, on November 7th, 2009 posted in: Investment, Markets, Money

“I think stocks are topping out, commodities are topping out and the dollar is making a bottom,” says Robert Prechter, president of Elliott Wave International and author of “Conquer the Crash“.

According to Yahoo Finance – Tech Ticker, Prechter also makes the seemingly counterintuitive argument that the dollar will rally because there’s so much debt, rather than being doomed because of it. “If the economy turns sour again in 2010, as he predicts, Prechter says the dollar will benefit as more dollar-denominated IOUs get called by creditors seeking to shore up their own balance sheets, as was the case in 2008.

“A sustained rally in the dollar would have devastating consequences for stocks, emerging-market assets, high-yield debt and commodities. But gold might be the exception, because it represents ‘real money’ and more people are questioning the global paper money system, Prechter says.”

Source: Aaron Task, Yahoo Finance – Tech Ticker, November 5, 2009.

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Dave

November 7, 2009 at 1:41 pm

Prechter has been wrong so many times that I am surprised that anyone still interviews him. He missed the tech run in the 90’s, was wrong about bonds in ’04 and has been consistently wrong about gold for the entire bull run from 255 to 1100. Ouch! He recently called the bottom in the dollar at 78, the top in gold at 960 and the top in stocks at the same time. Now he is trying again. You are a good fade, Bob.

Paul

November 7, 2009 at 2:14 pm

I agree. He’s useless, unless you take a contrary position to his views.

Bill

November 9, 2009 at 5:01 am

Thanks Bob, dead on the money. Gold…the barbarous relic.

JohnR

November 12, 2009 at 9:41 pm

The ElliottWave theorists tend to be long-term, big picture thinkers with the patience to let the events play out. In the short run, you can second-guess him and take the other side of the trade but I think his theories are in the process of playing out and will prove to be correct…he is supported in his thinking by people like Soros, Faber, Roubini..it is big bet to fight their ideas.

Gene

November 16, 2009 at 7:22 pm

Anyone who is looking for a guru to follow, rather than study the markets, should retire and buy some canned ham. No one has the markets delineated, no one, but many people can discuss the underlying forces. It is for each person to adjust to circumstances as needed, not look for a tout they can follow without thought.
Mr. Prechter weaves in and out of concepts and they tie together. It is wise, to notice the dollar may rise before the Fed raises interest rates. When that happens, you better have puts or shorts, rather than stocks with a PE of 100