Saturday, January 16, 2010

The Biggest Downwave Ever?

Time to promote another free report from Elliott Wave International.  In case your are wondering, I promote about 1 out of every 25 reports they make available.  Why promote any?  Because there is certain content that is good, certain content that is mundane, some insipid and some outstanding.  It is this latter category, outstanding, that makes its way to my blog.

From EWI's description of this free report:
Prechter saw something on the horizon that the shortsighted mainstream market watchers did not, which brings me to the untold portion of this story …

In Prechter's eyes, the bear market is far from over, and what he expects to happen after the current rally ends is significantly important to how you position your portfolio now.

Prechter's firm, Elliott Wave International, is now offering for a limited time The Most Important Investment Report You'll Read in 2010. Inside, Prechter reveals his big-picture outlook for U.S. stocks and the U.S. economy. The eye-opening 13-page report, originally published for paying subscribers to his Elliott Wave Theorist, examines the government's unprecedented involvement in the financial markets and private enterprise. It reveals what's already taken place in candid detail then focuses you on what the government's measures will actually do for the U.S. financial markets and economy.

What's the big deal?  Why now?   Hasn't Prechter been touting this scenario for the past year?  From Friday's night EWI Short Term Update:

"Primary wave 3 (circle) down has started.....The implications of a complete Primary-degree bear market rally are major. It means that Primary wave 3 (circle) is starting, which should be the strongest down portion of the bear market to date, stronger than the decline that unfolded throughout 2008 and into the first few months of 2009."

Nothing in trading the financial markets is a certainty.  The entire trading paradigm is steeped in probabilities.  We try to control uncertainty by identifying and following trends.  Reading EWI's analysis is part of the identification process.  Their arguments are not facts, but they do lend some perspective to what very well may be happening in the days immediately ahead. A major change-in-trend from UP to DOWN in the financial markets.  My Trend Following Models will pick them up soon enough.  The SPX Hourly Model is already on a SELL.  The Daily Model is next and it on the verge of its switch from LONG to SHORT.  My Models don't deal with implications from these changes, but Prechter's excellent analysis does. 

Now, back the Wings game, then the Cardinals.  Let's not lose perspective on what's important.



JAPO said...

Hi Allan,

Thanks for this info. This is a very important information for traders.

I only wonder what the EWI guys were writting on their newsletters back in 2003/04. Others like them were announcing that same P3 down wave, but that didn't happen. Will it happen this time?

You could do the exercise of applying your trend follower to the monthly and yearly charts of the S&P and DJI. I guess that the yearly one is still on a sell. Of course this is only an academic exercise for a regular trader.


Anonymous said...

Prechter is right. This market is going to reverse.

And it could be ugly.

And it's guaranteed to happen sometime between next week and when the sun implodes.

Anonymous said...

could do the exercise of applying your trend follower to Robert Prechter.

likely it said to short him into oblivion back when he said don't buy gold at $300/oz.

Prechter's Swingline stapler

* caveat emptor - the dreaded broken clock rule.

Stan Trenton said...

Prechter may provide the set-up but Allan's Trend Following Models provide the trigger. I'll simply wait for the signal.
Thank you, Allan!

Anonymous said...

How many times is Prechter going to cry wolf? I remember last year, he published his monthly letter EARLY, URGENT, because it was too important to wait. He of course said go short, and we went up up up from there. I'm a subscriber of Allan's models, which I am much more confident in, thank you.

Anonymous said...

I hope I have all my money out of the bank before the sun implodes.

Anonymous said...

Its just amazing that Prechter
still has a following, he's
terrible. And the bull market keeps
on going.

Anonymous said...

All good food for thought.
and always hard to come to a confident conclusion,about the Timing.
Prechter has gotten the timing very wrong in the last year, as have others.
There is a Reason for that. (it might be very fruitful to analyze and find out why)not just to whine about how 'wrong' various predictions have been.
Prechter's expertise deserves to be respected.
But WHY was he so off the mark on august 3,09 ?
Why has the market still been pushing up?
What ,or Who is responsible for it all ? A healthy economy recovering ?
A solid fundamental plan for growth and stability?
cash for clunkers?
'better than expected' phony numbers?
The Plunge Protection Team?
The Goldman Sachs Super Computers at the end of day?
The Fed and the Elite Master Engineers and the wizard of oz behind the curtain ?
did I forget anything?....Alcoa going up a penny ?
Is it because the whole market is a completely engineered Rigged Game?
which then begs the question,"Are they no longer able to keep the rigged game going?" Well, Why would That be.?
So far.... the game IS going along still.I respect the warnings about major market decline,but I sense the game is being rigged, and the correction will be engineered to HOLD somewhere around 1050,between 1100 and 1000.
Somehow,by the great power of the wizard of oz.
and until I see that Not happening,I'm inclined to believe the Great wizard will stick save the day.
The more time I spend analyzing cycles and counting waves,and reading those who proclaim warnings,including this blog,.... I keep thinking yes, we must prepare for a storm.
But the timing is too important to be wrong...wrong by 5 months(Prechter aug 2009) is totally unacceptable.
Believing in it too much last fall 'cost' me 40 k in missed profits.

But now the odds are that the timing might have arrived,finally.

But who can say that it will be a monster wave 3 down to hell. There are other wave counters who dont see this as the WAVE 3, they see an A-B-C from 1999,maybe a D completing and an E to come,that might hold up around 1000 or 900. Its all still a best guess.
But some facts are known.
Goldman has super computers.Goldman uses them. The government has married the FED and central banks.
There IS a wizard of oz behind the curtain. and we are still not in Kansas.
All I can say is 2 things right now.
IF the coming correction,or trend/wave reversal change is beginning AND it is the big WAVE 3 COLLAPSE...I believe any kind of hard vertical collapse could only be triggered by a major War at this time. some major event, terrorist event, global disaster, war, Economic War,collapsing the dollar, etc. if That happens I would cry WAVE 3 DOWN for sure. TITANIC.
but otherwise,how can you forsee such a catastrophic collapse,vertical down,hard and fast.
If it is the beginning of Wave 3 it ought to stop at first support levels,reverse up to resistance levels, us time to exit,time to evaluate,time to decide,and avoid catastrophe.(like the time frame from oct 2007 to june 2008)
The second thing I believe, is that in this uncertain market The Best (ONLY?)way to thrive in it is by TRADING THE WAVES,with a reliable system,playing short and intermediate term TRADES, riding the waves up and down, triggered from reliable signals....keeping it simple...,with one or two vehicles,-forget buy and hold,-sell any stocks that ARENT CORE HOLDINGS (just keep core holdings like NNVC),lock in profits,
and keep it simple.until we hit bottom and then buy stocks again.
now can someone just tell me where the bottom will be?
p.s. this is not advise for anyone ,just my thoughts on paper.

Anonymous said...

yup, if Pretcher is thick-skin enough, it's a no-brainer he'll be RIGHT one day. The trick he use is to get his staff to commit to the count and when he is eventually right, he "come out" and take all the credit.

That's how he becomes famous and still is. He has no problem getting strong following. There's always someone around to fill up those who have left. All he need to do is to go on the Tele and declares that he has nailed the TOP again :).

To be famous and to have a big following, you need just 2 thing: be SHAMELESS and HIRED lots of SCAPEGOATS!! :)

Trade carefully. Follow Tony from Elloit Wave Lives ON. He does a more consistent count than "GURU" shameless Pretcher and it's FREE!! :)