Bearish on StocksAs for the stock market, after its sharp rally in June, it dropped to a low and then spent many weeks getting back to where it was. Yet Prechter says now there's a "swing toward pessimism that will bring stock prices lower and the dollar higher."
But what caused him to send out a special report to his Theorist subscribers? Studying the Dow's wave structure since the top in April 2010 and comparing it with other wave structures, he discovered a similar set-up to 1987 before the October crash. On Bloomberg TV, he said to Fox, "It doesn't mean there has to be a crash, but it does mean keep your cash cool. The market needs another leg down." Here are the two charts for you to compare with your own eyes.
Bullish on the U.S. Dollar
In short, Prechter said that he's bullish on the U.S. dollar and bearish on stocks. He reminded Fox that last fall when everyone hated the dollar, it was the only market he liked. More than 90% of traders were bearish in sentiment readings, yet he had called for it to advance -- which it did in five waves that peaked in June 2010.
Since then the dollar has been in a correction, making bears out of the bulls. In fact, last week, there were only 6% bulls left. "They loved it at the top and hate it at the bottom," Prechter pointed out. With strong bearish sentiment and a wave structure forming a low, he explained that he is once again bullish on the U.S. dollar. Here's the chart that should have appeared on the television screen during the interview rather than the generic chart Bloomberg TV put up.
MyView
During the Great Depression in 1930, the US stock market drop about 90% over 4 years with 9 sharp rebounds around 15 to 30%,
What about the Mother of Great Depression in 2010? or 2012? I believe it will be dropping about 80% in 2 years time beggining by 4th quarter of 2010. So it will start from 15 September 2010 to 15 September 2012.
Why 15 September,
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