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Bob Prechter Reveals the Most Dangerous Gold & Silver Myths

Commodities / Gold and Silver 2010 Mar 23, 2010 - 04:01 PM GMT

By: EWI

Commodities Best Financial Markets Analysis ArticleBy Nico Isaac

Right now, the gold BULL-ion bandwagon is more crowded than a New York subway train during rush hour. But before you squeeze your way into the crowd of passengers, you should know one thing: Those steering the course are using outdated maps based on ill-conceived notions and illusory hopes.


Where can you get better information about gold and silver? Take a look at the latest FREE resource from Club EWI, the Gold and Silver eBook. This riveting, 40-page eBook pools the recent and archived writings on the precious metals by EWI president Bob Prechter himself. The result is a comprehensive collection that spans the last four decades of gold and silver history to expose the most dangerous market myths. Off the top is this familiar bit of "wisdom" from the school of Alan Greenspan:

It is impossible to foresee the end of major trends in precious metals

BEFORE they occur. Hindsight is foresight.

NOT SO, says Prechter. Since gold and silver established their all-time record peaks in 1979-80, he has stayed one step ahead of the metals' history-making turns. Here, Chapters 2 and 3 of the Gold & Silver eBook offer up the following excerpts from Bob's earliest writings:

Silver

  • November 18, 1979, Elliott Wave Theorist (EWT): With silver prices hovering near $20/ounce, Bob wrote: “If my wave count is valid, silver can be expected to drop back down to between $4 and $6, $3.20-$3.49 some time in the next decade.”

What actually happened: From there, silver prices embarked on a 13-year bear market that saw prices plunge into the $3.50-per-ounce area.

  • March 26, 1993, EWT: “Silver is approaching a major bottom" of its decades-plus long downtrend.

What actually happened: Silver found its low in 1993.

Gold

  • December 9, 1979, EWT: "After 13 years of rise, Elliott counts now suggest an important top is near in gold. The downside target is at least $282.50."

What actually happened: While the price projection for gold's peak was far off the mark (the Theorist cited the upper $480/ounce range), the time target of early 1980 was met with accuracy. From its 1980 peak, gold prices plummeted nearly 70% before hitting bottom in 2001.

  • At the Crest of the Tidal Wave, 1995: “One attractive termination date for the gold bottom is New Year’s Day of 2001 (plus/minus a month). That way, it will have lasted a ... a lean 21 years from the 1980 peak."

What actually happened: Gold registered its low at $255 on February 20, 2001.

Now that we can see that it is possible to benefit from foresight about the end of major trends in precious metals, what about these other popular notions --

  • Gold always goes up in recession and depressions.
  • Gold always performs better than stocks in economic downturns.
  • Gold and Silver are just beginning (as in the year 2010) their biggest bull market runs ever.

Download Robert Prechter's FREE 40-Page Gold and Silver eBook. Is gold a simple buy-and-hold at today's prices? The independent insights in this valuable ebook deliver Prechter's complete analysis and help you decide how to – and how not to – incorporate gold and silver successfully into your own investment strategy. Learn more, and download your Gold and Silver eBook here.


Nico Isaac writes for Elliott Wave International, a market forecasting and technical analysis firm.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

truthhurtsss
24 Mar 10, 02:27
Broken clocks again

Yeah, you called some tops and some bottoms.

Show us also all those calls of tops and bottoms that did not come to pass.

Show us also those calls for tops and bottoms that took months, years and even decades to come to pass.(Quote from Clive Maund: In practical terms, being right too soon is as bad as being wrong!)

My friends and I were subscribers from the 1980s. All those friends are living in pauper shorting the S&P from the 1980s following EWI's advice. One spends his retirement fishing. A second spends his in religious pursuits. A third stopped after realising that "egoistic people cannot make good judgement".

Readers should read Mark Hulbert's column in: http://www.marketwatch.com/story/elliott-wave-adviser-now-aggressively-bearish-2009-11-25

Follow up by reading Nassim Taleb's "Fooled by Randomness" and you'll have a better understanding and hopefully not be fooled by selective advertising.

Also read the excellent paragraph that I append below in:http://www.marketoracle.co.uk/Article16948.html#comment89469

Stock Market Crash Calls

1. You CANNOT know with any reliability that the stock market is going to crash until AFTER it has actually peaked and entered a downtrend. Anyone that tells you a bull market pushing to new highs is going to crash is going to lose you all your money, as the market rallying significantly from the crash call NEGATES THAT CALL where trading is concerned, because any short positions enacted upon the call are stopped out!

2. You can only enter a Crash TRADE barely a day or hours before the crash event. Crash calls made weeks, months or years in advance are WORTHLESS where trading is concerned, and where investing is concerned, all investors should have stops on their positions based on technical considerations of where they would admit their analysis is wrong on a particular stock.

Crash calls are dangerous in that bring emotions into play which instead of staying focused on reacting to price action, adrenaline gets traders to commit to positions that will soon most probably bust their accounts where EVEN if the market eventually does CRASH, they will have been wiped out by the intervening rally SINCE the crash call! It is this fact that that is always forgotten.

Don't believe me ? Go check ALL of the hyped stock and other market crash calls that in actual fact WERE FOLLOWED by moves that would have wiped out REAL trades had those calls been acted up on.


PrechterIsAlwaysWrong
07 Apr 10, 19:15
Broken Clock Is Right

I believe Robert Prechter and his Elliott Wave are sponsored by Wall Street banks to herd in traders from whom they take the opposite side of the trade.

For ANYONE considering Elliott Wave and Prechter, run, run as far away from them and their recommendations---they are always wrong and it is easily verifiable by google search of Prechter and Hulbert and Markewatch. During the past 25 years, had you followed Prechters advice, you would have lost 98% of your money, versus a gain of 800% being long the S&P. As for Gold/Silver, Prechter has been calling for a selloff back to $200, then $400, then $600 (all the way up) since 2001.

Honestly, after being a subscriber and following multiple services, I honestly came to the conclusion that nobody could be so consistently wrong, so I contend that Prechter is not as stupid as he appears, but rather, is paid by the establishment to spew out false information to unsuspecting traders in order to herd them in to losing money. Nobody can be so consistently wrong, nobody.

Stay away from Precther, Hochberg, and Elliott Wave----I wish somebody had warned me with the FACTS before I missed out on many opportunities following their horrible, consitently wrong advice.


John Locke
08 Apr 10, 08:55
Smoke Monster

Prechter is the smoke monster out of lost.


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