In this video Robert Prechter discusses the recent global sell-off that has sent all major U.S. averages 10% below their 2010 highs with Aaron Task of Tech Ticker. Prechter reiterates the position that he’s been holding for several months that the bear market rally that he successfully identified and rode in March 2009 is now over and we should prepare for the next phase of a protracted bear market:
Taking a huge step back, it is important to remind ourselves where we are in the 18 year stock market cycle. If we assume late 1999 or early 2000 as the end of the previous 18 year cycle and the start of the current one, we still have about 8 years to slog through this secular bear market.
While the 18 year cycle normally would suggest that hard assets are more favored, Prechter believes that in the deflationary environment that we are in right now, even commodities are no safe haven. A lot of what he says confirms the analysis from other trusted sources like Bob Janjuah, Jeremy Grantham and David Rosenberg. The key difference is that, even though Prechter remains humble, he has been much more nimble than any of them in trading this volatile market.
To get the full details of what he refers to in the video, including when he says the “giant head and shoulder formation”, download the complimentary 10-page issue of the recent Elliott Wave Theorist.
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