In the May 2008 issue of his monthly Elliott Wave Theorist,
Robert Prechter showed this chart of the Dow Jones Industrials.
As you can see, prices go back to the 1970s.
Please note that on the day this chart published (May 16), the
Dow closed at 12,987 — barely eight percent below
the Dow’s all-time high of the previous October.
Yet, as you can also clearly see, Prechter labeled the
white space below the May 2008 price level as “Free Fall Territory.”
At the time, no one else dared to publish such
a bearish forecast. This was before the Lehman
bankruptcy, the bailout binge, the home foreclosure crisis, and
certainly before the worst of the stock market collapse.
In his June 2011 Theorist, Prechter published an update
to the chart above, and here’s the major difference: The
updated chart “telescopes out” by one full degree of trend.
Prices go back to the 1930s. The scale
of the white space surrounding this chart’s “free fall territory”
label will show you what Prechter truly means.
His commentary in that issue also observed that
“the
March-April [2011] rally was one of the most passionate bouts
of stock buying I have ever witnessed.”
Bob Prechter made this observation not in admiration, but as
a warning.
In the past three weeks, the Dow Industrials have plummeted nearly
2,000 points. Most investors are confused and scared. How
far down will the decline travel? Will it end tomorrow
or go on for years?
The answers to these questions are crucial to your financial
health. You can still get ahead of the trend, but only if you
prepare now. Read EWI’s long and near-term forecast. Get it in
one comprehensive package — and stay ahead of the crowd.
And — get Bob Prechter’s August Elliott Wave Theorist.
It includes “many dozens” of charts. Bob will also record this
Theorist as a rare “video issue” — you’ll be able to
watch and listen as Prechter himself presents all the content.
Also — as part of the same package, you get the August issue
of our Elliott Wave Financial Forecast
— you’ll see and read about the latest big picture in stocks,
dollar, gold and more.
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This
article was syndicated by Elliott Wave International.
EWI is the world’s largest market forecasting firm. Its staff
of full-time analysts led by Chartered Market Technician
Robert Prechter provides 24-hour-a-day market analysis to
institutional and private investors around the world.
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