The above title was assigned to this post while writing it and realizing I was blabbing a lot about myself and my own methods.
I finally had the time to do more than skim Robert Prechter’s most recent EW Theorist. I can see why they released it for free, because in it he ran a laundry list of calls that have gone well and one – the US stock market – that had not yet done so (and indeed has been the market that has defined him as a frustrated perma-bear to many) as of its publish date. Well, shortly thereafter that holdout market went well to join the rest of the world.
Here is the link again, if you have not read it: Most recent Elliott Wave Theorist
I should note that I do not currently subscribe, although I have at times in the past. I need to be very clear in my own thinking and trust my own methods, which have been working well, without too much of anyone else’s cross-talk. But I always find Prechter an interesting read when I do have access. He’s beyond interesting, really. He’s pretty much one of a kind.
Some of my observations…
- Prechter mentions exactly what I have harped on repeatedly; how economists (and financial services entities) tend to extrapolate things in linear fashion. He notes “we extrapolate them in fractal fashion”. I on the other hand, extrapolate them with a combination of technical, sentiment/psych and inter-market indicators. Ref. for instance the PALL-Gold ratio, which made a bearish signal months ago. I knew not why, but we certainly respected it and were prepared for the market damage that followed it.
- As noted in the previous post, the guy was right on with Crude Oil, over the long-term. EWI were also right on with Asia and Emerging Markets, while admitting that they have fumbled the US stock market, which “has just floated around as if in a dream”. Well, it woke up last month and I for one could not be happier because finally it is in motion. I care more about motion than direction.
- Gold bugs used to laugh at Prechter routinely. Indeed, I had to use my will to tune him out as his calls for gold’s top rose from 375 to 425 to an eventual 1900, when he was finally right. US stock bugs laugh at prechter the same way now. Anyway, he goes into detail on gold, silver and the miners, calling for a significant counter trend rally in the bombed out sector as well as in crude oil. But these things are within larger bear markets.
- Finally, he makes some good sense of Dow Theory, an art that I don’t pay much attention to, but appears valid and he shows why.
Anyway, the Theorist is well worth your 10 minutes of time if you’d like to pick it up, free of charge. Also covered are China, real estate, etc. It’s a take on markets as only Prechter can take it.