Monday, January 19, 2009

Prechter's Post-Analysis

In this week's Elliott Wave International's publication, Robert Prechter provided a review of some of his prior forecasts:
  • "Stocks, oil, metals, commodities and many foreign currencies all sport recent 90%+ bullish sentiment readings. Extreme optimism toward so many markets implies that a collective tumble could happen at any time". NOVEMBER 2007
  • "Contraction is on its way, and if 'Conquer the Crash' is correct, it will be the harshest downturn in memory for everyone under the age of 80." DECEMBER 2007
  • "In 'C' waves the news and the market are fully compatible: the trend is down, and news is bad. So we forecast a dramatic increase in the frequency and severity of bad news over the course of wave 'C'."
  • "Many emerging market indexes will likely plunge even more dramatically than the U.S. stock market." FEBRUARY 2008
  • "The real estate collapse is spreading. The commercial market is looking more and more like the residential market everyday." FEBRUARY 2008
  • "Banks are hoarding cash and for good reason. The economy will tank, and consumers and business alike will have even more reasons not to lend or borrow. Like any law of nature, there's no stopping it now." APRIL 2008
  • "A 'C' wave decline provides no place to hide except cash." MARCH 2007
  • "The fundamental effects that result from it are way too serious to go unrecognized by the public. But critical elements of the old delusion remain. Even though every financial mania in history has been followed by a commensurate bust, authorities and many economists continually state that the strength of the collapse was completely unforeseeable. Even in the midst of a two-and-a-half year credit market seizure, we read that the collapse was a total surprise." JANUARY 2009

"The psychological foundation of liquidity is confidence. We cannot stress this point strongly enough. When investors are optimistic, confidence remains high and liquidity expands. When this optimism goes away, the spigot will run dry. The psychological foundation for the asset boom, a rise in social mood, has slipped away. As confidence continues to wane, the resulting destruction mounts. It may seem strange that even as the fundamental changes dig in, people cannot see what is before their very eyes. Of course, this is how the progression toward a pessimistic extreme has to happen. The untold story of 2008 is that it is just the opening salvo." Robert Prechter

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