Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Prechter Stands Alone Again... He's Done the Math

Stock-Markets / Stocks Bear Market Sep 04, 2009 - 03:48 PM GMT

By: EWI

Stock-Markets

Best Financial Markets Analysis ArticleNeil Beers writes: So Bob Prechter is bearish again.

That may be no surprise to some, but recall that Prechter was about the only bull on February 23 of this year when he covered the short position he had recommended on July 17, 2007. That was nearly two years later and 800 points lower in the S&P. And the Daily Sentiment Index (DSI) reading for the S&P had gotten down to only 3% bulls!


His February 2009 Elliott Wave Theorist explained, "The market is compressed, and when it finds a bottom and rallies, it will be sharp and scary for anyone who is short." Elliott Wave analysis, the DSI, and other indicators suggested it was time for a Primary-degree bear market rally. And that is what we got.

Now in his August 2009 Theorist, Bob explains what "the prudent thing to do" in the markets is, based on the same Elliott wave pattern and sentiment indicators -- plus the Dow's 3/8 Fibonacci retracement from the March 9 low. 

For more analysis from Robert Prechter, download a free 10-page July issue of Prechter's Elliott Wave Theorist.

What's so special about Fibonacci? And why is a certain level of Fibonacci retracement so significant in conjunction with The Wave Principle? Well...

In its broadest sense, the Wave Principle suggests the idea that the same law [the Golden Ratio] that shapes living creatures and galaxies is inherent in the spirit and activities of men en masse. Because the stock market is the most meticulously tabulated reflector of mass psychology in the world, its data produce an excellent recording of man's social psychological states and trends. This record of the fluctuating self-evaluation of social man's own productive enterprise makes manifest specific patterns of progress and regress. What the Wave Principle says is that mankind's progress (of which the stock market is a popularly determined valuation) does not occur in a straight line, does not occur randomly, and does not occur cyclically. Rather, progress takes place in a "three steps forward, two steps back" fashion, a form that nature prefers. More grandly, as the activity of social man is linked to the Fibonacci sequence and the spiral pattern of progression, it is apparently no exception to the general law of ordered growth in the universe. ... The briefest way to express this principle is a simple mathematical statement: the 1.618 ratio.

-Elliott Wave Principle, chapter 3

Fibonacci ratios in conjunction with The Wave Principle can help you anticipate trend changes. They allow you to calculate specific price levels of when and where a wave is likely to end. In this case, where the rally from the March 9 low is likely to end. There are several Fibonacci retracements that appear most commonly, so the market could of course move higher before it settles on the next wave down, "but we are no longer compelled to wait."

Bob Prechter's August Elliott Wave Theorist published a week and a half early: he did so to give subscribers time to prepare for what's ahead. The issue provides a list of levels that mark Fibonacci and Elliott-wave related retracements for the rally. He analyzes which one is the most likely end point, and even explains how you can make the most of the waning rally.

You don't have to be taken by surprise. Get the latest Elliott Wave Theorist and you'll see where the rally is likely to end. Think about the difference this knowledge can make for you.

For more analysis from Robert Prechter, download a FREE 10-page July issue of The Elliott Wave Theorist. It challenges current recovery hype with hard facts, independent analysis, and insightful charts. You'll find out why the worst is NOT over and what you can do to safeguard your financial future.

Neil Beers has a bachelors degrees in political science and philosophy, and a masters in classical languages. His broad range of study and focus on ancient and modern thought led him to Elliott Wave International to research and write about the Wave Principle, Socionomics, and human social behavior.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Nadeem_Walayat
05 Sep 09, 07:36
Beating Prechters calls

Not exactly standing alone, I beat pretchers Feb call by more than a month and about 1,500 points on the Dow - Dow Bottom 6,600, not 8,000.

Dow Jones Stock Market Forecast 2009 (20th Jan 09)

Bottom confirmed - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470 (15th March 09)


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules