Robert Prechter Calls for Another Huge Wave Lower for the DOW and Falling Commodity Prices

dragon

Watch the video:


Text

Norseman88

<< <i>Watch the video:


Text >>



He's not the alone in forecasting a major selloff in the stock market. Of course there are some people here who will claim he's a quack and that all is fine in the stock market, as for me I've been slowly liquidating some of my positions and am at 60% cash maybe it's time to sell some more???

57loaded

he says this as well

Text

dragon

<< <i>he says this as well

Text >>







Thanks for that link, I didn't see that one. Gotta admit he does make some valid points.

ttown

Does it? The goverment loses control past charts of the way the market should operate are useless. Hey charts are great when Wall Streets black boxes are in control but the dollar drops which it will and maybe all at once prices of PM's will soar along with commodies.
I think the FED has done all the damage control they can on the dollar you can't just keep buying your T-bills forever and you can't just print money and expect the dollar to remain strong. The question really is can they control it for a soft landing....I'm not sure they can.

Don't expect the stock market, PM's, and commodies to alway go down together like they did last year. The FED had a lot to do with that unless they want to pump trillions into the Wall Street machine again to control every investment IMO.

57loaded

i agree ttown

i found the second link and had to post it as many are fans of the wave theory

ergo where then would a 'flight" to safety be....... Air China?

jmski52

He didn't really give a reason why the dollar would be getting stronger, did he? He just compared the relative strengths of gold & silver vs. the dollar from last year's dollar bottom to the recent dollar bottom.

Let's see...falling tax receipts and rising unemployment both call for monetary stimulus (money creation). Waning demand for US debt calls for (money creation) by the Fed in order for the left hand to buy the unwanted T-Bills from the right hand. Plans for massive government spending programs call for um, let's think real hard here.....oh, more (money creation)?

And that's going to bolster strength in the dollar?

Hmmmm. Maybe I'm dumber than I thought.

And then, there's real estate. If 48% of all residential mortgages are expected to be under water by 2011 or so, who amongst us really thinks that the politicians will be willing to resist another futile attempt to inflate another bubble-type rescue package with more (money creation)?

And then, there's commercial real estate. What to do? I know that Bernake doesn't want a depression-style deflation. So, what are the other choices?

roadrunner

Let's see Prechter has been wrong on gold for years now. You can probably throw commodities into that mix as well. So now we are supposed to believe him? His forecast for $200 gold is still out there as well. It took nearly 20 years to "prove" him right on the stock market. Maybe it will take another 20 years to prove him right on gold and commodities?

And if I'm counting the Elliott waves since March, we are still early in wave 5 down. So the dollar probably hasn't seen its low point in this cycle yet. It must might stage a strong rally this fall back to the .82-.92 range once again. But it would probably be its last hurrah for quite a while.

roadrunner

mrearlygold

What's a "cash equivilent" according to prechter?

dragon

rr, Don't get me wrong, I'm not a Prechter follower or fan, just throwing stuff out there for discussion.

goingbroke

I too have been reading many advisers on gold blogs today and all of them are recommending SHORT ON GOLD. Its hard to figure them all out????? as lately as yesterday they all were upbeat on the gold price going higher. Now they all are predicting a BIG drop in gold and silver prices. I wonder if it would be smart to sell a portion of my gold holdings at this time? If I sell I would be taking about a $30.00 loss on each ounce. Any thoughts from all the experts here on the forum? Is anyone else selling any of their gold or thinking of doing so? I'm invested to a degree in gold and silver, but I do have some concerns. The US is printing money wildly, but so and perhaps to a greater degree are all the other major (except BRIC) countries. For that reason, and if stocks do go down from here, the dollar could be a safety trade, going up against the Euro, Yen, etc. Wouldn't gold and silver go down under such circumstances? Further, what if despite the excess money being printed, the economy goes into a W recession, i.e., another leg down? This could certainly delay inflation, and perhaps accelerate deflation.

RedTiger

Prechter made his name back in the 1980s for his stock market calls. I looked up his more recent stock market record, and I was surprised that he is ranked quite high. This is for audited trades as they appear in his newsletter, hotline or whatever. So while he does seem to like the limelight with the big calls, he also seems to have a solid track record. An audited track record at that.

Norseman88

<< <i>I too have been reading many advisers on gold blogs today and all of them are recommending SHORT ON GOLD. Its hard to figure them all out????? as lately as yesterday they all were upbeat on the gold price going higher. Now they all are predicting a BIG drop in gold and silver prices. I wonder if it would be smart to sell a portion of my gold holdings at this time? If I sell I would be taking about a $30.00 loss on each ounce. Any thoughts from all the experts here on the forum? Is anyone else selling any of their gold or thinking of doing so? I'm invested to a degree in gold and silver, but I do have some concerns. The US is printing money wildly, but so and perhaps to a greater degree are all the other major (except BRIC) countries. For that reason, and if stocks do go down from here, the dollar could be a safety trade, going up against the Euro, Yen, etc. Wouldn't gold and silver go down under such circumstances? Further, what if despite the excess money being printed, the economy goes into a W recession, i.e., another leg down? This could certainly delay inflation, and perhaps accelerate deflation. >>



Like Roadrunner said the dollar might stage a rally here which would bring the prices of precious metals down substantially in the short term.
I'm actually toying with the idea of selling a fair amount of 90% Silver along with the few remaining 50 and 100 oz. bars I have and sitting on the cash for a chance to redeploy the money into more green monster Eagle and yellow Maple boxes. I am content to ride it out with the rest of my Silver as the mountain of money being printed by the Fed will eventually cause Silver and Gold to rise substantially.
I wonder if I should consider selling some of my Palladium as it will probably pull back considerably too.

Norseman88

One other thing a stronger dollar would do is push the stock market down along with commodities.

goingbroke

Interesting....... Any one else selling any PMs?

goingbroke

CBOE MKT VOLATILITY IDX( .VIX

Change*
Volume

25.99
Last Trade 1.00 (+4%)

renman95

<< <i>He didn't really give a reason why the dollar would be getting stronger, did he? He just compared the relative strengths of gold & silver vs. the dollar from last year's dollar bottom to the recent dollar bottom.

Let's see...falling tax receipts and rising unemployment both call for monetary stimulus (money creation). Waning demand for US debt calls for (money creation) by the Fed in order for the left hand to buy the unwanted T-Bills from the right hand. Plans for massive government spending programs call for um, let's think real hard here.....oh, more (money creation)?

And that's going to bolster strength in the dollar?

Hmmmm. Maybe I'm dumber than I thought.

And then, there's real estate. If 48% of all residential mortgages are expected to be under water by 2011 or so, who amongst us really thinks that the politicians will be willing to resist another futile attempt to inflate another bubble-type rescue package with more (money creation)?

And then, there's commercial real estate. What to do? I know that Bernake doesn't want a depression-style deflation. So, what are the other choices? >>



/

No Comrade, you are smarter than you think. You have the answers grasshopper, now ride the wave but not to long. The trick is to know when to get off and paddle back out for the next wave. At some time you will have to go to shore to rest and eat and watch the tide go out.

R95

goingbroke

Well I spent a few howers reading Prechters stuff prechter is very much like the “Oracle at Delphi” every comment is a hedge against another comment. in the end some form of his predictions will most likely be correct but as Keynes said (paraphrasing) in the long run we are all dead.
JMO. It's important to remember that the Dow is up over 40 percent in five months so it's only natural to have pullbacks but if we are to see the index break through the 10,000 barrier, there needs to be more signs of economic recovery Blessed are the young, for they will inherit the National Debt.” --Herbert Hoover

ttown

GoldMoney Alert - 10 August 2009

roadrunner

Presenting Prechter's view is fair game, just don't bet the farm of one view point, esp the guy who has been wrong on gold for 7 years running. The gold and silver markets are minute compared to the currency and stock markets where fundamentals can move a market and keep it somewhat sane. But counting waves on a piece of paper and being a market insider to all the games going on in the PM sector are 2 totally different skill sets. The gold and silver markets play a big role in pricing world currencies and controlling anxiety and fear. To control them with minute amounts of money is something that cannot be passed up by the playerz that have a vested interest in seeing them "well-managed." It started with the London Gold pool in the early 1960's and has continued ever since.

As far as what gold and silver are doing in the next month or two, no one really knows. All we do know is that the major currencies, interest rates, and the SM will influence the pog. Welcome to reality. What the dollar does is probably the primary influence. And currently it seems to be deciding whether it wants to go up or down. Prechter thinks it has finished its 5th wave down and to me it looks like it has more mini-waves to complete. Being out of gold at this time is probably more risky than being in it. A move to new all time highs is probably coming sometime in the next 1-10 months. While gold can be kicked back to the $845-$860 yet one more time, I don't think that's the likeliest set up. Even $675 could happen again, but that seems remote. I'd be surprised if $900 gets broken again but one must allow for all possibilities. More than likely there will be a better buying opportunity over the next 1-3 weeks.....but as usual, no guarantees.

While Prechter is calling for a C wave down in gold from here, note that he compares it to the previous 2 C waves of the past 5 years. And in each case the C wave fell to about half the distance of the A wave. Gold seems to be following a similar scenario again and such a C wave might only take us back to the $865-$905 range. Prechter doesn't also explain that gold's correction back to $700 in 2008 was predicated on a 100 year black swan SM crash "flight to safety" in treasuries and the dollar. One could almost negate those few months from the PM/commodity charts as being one off events that had no real bearing on the overall trend. Fixating on that A leg down to $700 makes many believe that a C leg to much lower than $700 would be quite probable. If that's the case, join the Nadler club waiting for the next train to $600-$650 gold (currently running 2 years late).

roadrunner

Wolf359

Maybe this will help all the Nervous Nellies.

Peter Schiff - on the Dollar

Another Peter Schiff Interview from 8/6/2009

rpw

The one thing he states in the article that I agree with is "I would not be loading up on gold at this point, you'll get a better opportunity later." The dollar is toast down the road apiece, just how far cannot be determined right now. If it makes it to 2012 I suspect it will be intentionally crashed at that time to provide a useful emergency. My bet is late 2010 to early 2011. I have seen enough evidence to convince me that before the dollar goes down for good that there will be the mother of all suckers rallies for the dollar and commodities and pm will tank. That will be the moment to strike and get ones hands on as much physical gold and silver as one can. I am picking up the odd gold and silver, mostly in trade for other item, but I am slowly moving into cash to be ready when the opportunity presents itself.

roadrunner

I wish you luck loading up on gold during the next severe tanking similar to 2008. Most physical gold stayed in hibernation during that period or huge premiums were being asked for it. In fact you couldn't even get it anywhere near the low $700 spot price in gold. Premiums at one point were running as high as $100-$125 over spot. You can expect the same type of "deal" if there is a 2nd deleveraging event. If you thought it was hard to find gold back then, it will be even harder the next time around. During each successive cycle more and more physical gold will be remain in hiding.

roadrunner

jmski52

In general, I agree with this:

The dollar is toast down the road apiece, just how far cannot be determined right now. If it makes it to 2012 I suspect it will be intentionally crashed at that time to provide a useful emergency. My bet is late 2010 to early 2011. I have seen enough evidence to convince me that before the dollar goes down for good that there will be the mother of all suckers rallies for the dollar and commodities and pm will tank.

However, I'd be a little leery of trying to accomplish this to perfection with the timing that you would need:

That will be the moment to strike and get ones hands on as much physical gold and silver as one can. I am picking up the odd gold and silver, mostly in trade for other item, but I am slowly moving into cash to be ready when the opportunity presents itself.

I agree more with roadrunner:

I wish you luck loading up on gold during the next severe tanking similar to 2008.

I was wondering about that myself. I think that gold, in relation to dollar denominated paper assets is a "two-steps forward, one step back" situation - in terms of the relative values. Note, relative values.

The relative values change every day, and gold can be gaining on the dollar even as both gold and the dollar are crashing. Same thing for gold vs. stocks.

The handwriting is clearly on the wall. Why get too fancy?

roadrunner

Getting too cute in this market will cost one dearly in being caught with no PM's when this bird takes off to new all time highs. There will be little to no time to react, let alone find buyable metal at what had been typical premiums. I found myself falling prey to this philosophy in my trading account by getting cute with gold when it hit $904 and $912. While I loaded up quite a bit, I quickly bailed on the next sign of weakness figuring it was headed lower. I then missed both of the next up moves in my paper account (my physical holdings were added to however).

While gold may go down in price, it does make sense to buy weakness at each major step. Just don't load up the boat on the first few steps such that you have nothing left as the price does bottom. The buying should be the heaviest as the bottom approaches. If you ran out of money, you bought too much too early.

roadrunner

57loaded

@ RPW i can't see gold retracting to below 925 or it's 09 low of 817 ish

at this point i don't see even a huge sucker rally in the dollar ripping gold proportionately

rpw

@ RPW i can't see gold retracting to below 925 or it's 09 low of 817 ish

Thanks to you and previous posters for pointing out the weak point in my thinking. I had not considered the probable run up in premium and/or unavailability of physical gold. I suspect you guys are on to something and I am adjusting my behavior accordingly.

ttown

In 79/80 you could wait a couple hour in you BM shop just to make a transaction. People were buying and selling. I was waiting in those days one day and a guy with his name on his work shirt came in and dropped $80k down at once on Platinum at it's peak. It look like he may have owned a gas station and this was his savings, man I can still remember that and really felt sorry for the guy.

The internet wasn't around but looking at those outlets last year they didn't have anything to really sell and Ebay prices were just plain stupid. Don't make the mistake of the example above AVERAGE just as you would in the stock market getting in all at once your either smiling to the bank or losing money after the peak when you see PM's aren't a long term investment, which really stock, CD's, or any investment should be balanced to the ecomonic cycle. JMO


When/If PM's explode the seller will be us with mostly buyers so if your in the shop when someone is selling you might score if the dealer hasn't already made some deals with his regulars (which is more than likely).

Norseman88

<< <i>In 79/80 you could wait a couple hour in you BM shop just to make a transaction. People were buying and selling. I was waiting in those days one day and a guy with his name on his work shirt came in and dropped $80k down at once on Platinum at it's peak. It look like he may have owned a gas station and this was his savings, man I can still remember that and really felt sorry for the guy.

The internet wasn't around but looking at those outlets last year they didn't have anything to really sell and Ebay prices were just plain stupid. Don't make the mistake of the example above AVERAGE just as you would in the stock market getting in all at once your either smiling to the bank or losing money after the peak when you see PM's aren't a long term investment, which really stock, CD's, or any investment should be balanced to the ecomonic cycle. JMO


When/If PM's explode the seller will be us with mostly buyers so if your in the shop when someone is selling you might score if the dealer hasn't already made some deals with his regulars (which is more than likely). >>



I agree with you that metals normally are not a good long term investment however these are not ordinary times. Of course at some point metals will probably overshoot to the upside and a person will have to liqidate their holdings as metals will undoubtedly fall faster than they went up. The only exception would be if Silver, Gold or the PGM's went into supply deficit and no suitable substitute was found then the price could rise exponentially.

Konahead

<< <i>

<< <i>In 79/80 you could wait a couple hour in you BM shop just to make a transaction. People were buying and selling. I was waiting in those days one day and a guy with his name on his work shirt came in and dropped $80k down at once on Platinum at it's peak. It look like he may have owned a gas station and this was his savings, man I can still remember that and really felt sorry for the guy.

The internet wasn't around but looking at those outlets last year they didn't have anything to really sell and Ebay prices were just plain stupid. Don't make the mistake of the example above AVERAGE just as you would in the stock market getting in all at once your either smiling to the bank or losing money after the peak when you see PM's aren't a long term investment, which really stock, CD's, or any investment should be balanced to the ecomonic cycle. JMO


When/If PM's explode the seller will be us with mostly buyers so if your in the shop when someone is selling you might score if the dealer hasn't already made some deals with his regulars (which is more than likely). >>



I agree with you that metals normally are not a good long term investment however these are not ordinary times. Of course at some point metals will probably overshoot to the upside and a person will have to liqidate their holdings as metals will undoubtedly fall faster than they went up. The only exception would be if Silver, Gold or the PGM's went into supply deficit and no suitable substitute was found then the price could rise exponentially. >>




Like everything else on this earth, there is a finite quantity that some day will run out. Question is when.