From Prechter:
Any individual can be wrong about markets. In the past when I have been wrong I realized in retrospect that either I was a member of a herd or I bet too early against one. But the fact remains that when representatives across an entire profession of exogenous-cause thinkers agree on the future trend of a market, it’s a signal.
The lessons are: (1) Any passionate consensus among economists is a terrific market timing signal, because it means that there is no one left to convince and therefore the market in question should have extreme difficulty continuing in the predicted direction; and (2) an alert analyst can learn to recognize these times and use them to advantage.
Prechter argues there are several themes out there right now that investors, economists, and markets all believe to be true just like they did with interest rates in the 1980s.
1.The dollar - everyone is bearish.
2.Interest rates - everyone thinks they're going to rise.
3.The stock market - everyone is bullish but corporate insiders.
4.Inflation expectations - everyone thinks it is going to go higher.
5.Economy - everyone is confident in 2011.
6.Oil - everyone thinks it is heading higher.
2.Interest rates - everyone thinks they're going to rise.
3.The stock market - everyone is bullish but corporate insiders.
4.Inflation expectations - everyone thinks it is going to go higher.
5.Economy - everyone is confident in 2011.
6.Oil - everyone thinks it is heading higher.
MyView
When did the Concensus make most of the money? This is a Casino Capitalism, the House always win.
Russia failed because of central planning. That does not Free Market is better.
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