Friday, August 21, 2009

"One for the record books"

"We will be watching sentiment and momentum closely for divergences and other signs of exhaustion in the days ahead; the decline that follows the next peak should be one for the record books."

If you ever considered subscribing to Prechter's services, this is the time to take a look because in the next few weeks the trade of a lifetime is expected. You can click any of the Elliott Wave International links on this page (in which case I get credit) or you can go to their web site directly.

The quote above is from tonight's Short Term Update, used without permission, but I don't think they will mind in light of my nice plug above.



Anonymous said...

And for non elliot wavers, what do we see other than a massive breakout. I agree that the market is stretched (18% above 200) and sentiment is running to extremes, but is it at all possible that we have indeed entered a new bull phase that will carry this market much higher (we are 550 points off the highs)

Anonymous said...

All I can do is laugh at these projections. Stick to stock picking and leave the long term forecasts to people who are almost always proven wrong.

Anonymous said...

Are you saying by subscribing to a Prechter's service we could get the trade of a lifetime? Which service would that be?

Anonymous said...

Is this trade of a lifetime to go along with the million dollars from the $10,000 of NNVC I bought at 1.00 which is now worth 20% less?

Anonymous said...

Thanks for posting Allan! My news letter predicts strong USD & Deflation consistent with Elliot Wave. We are over due, but it may not be until October? PS, I am down big in my short positions! FAZ, EDZ. Keep posting.

Anonymous said...


I think your excellent stock picker

and you seem like a really nice guy

but your long term forecasting has

been awful. Were now up almost 6

months, its time to throw in the

towel, this is more than a bear

bounce. everbody and his brother

in law is looking for a big down

in the fall, not going to happen.

were on the verge of a parabolic

up move, 20k on its way.

Anonymous said...

I agree that Allan's long term prediction has not been very good. In Allan's defense, he gave a projection of 5 years for NNVC, he didn't say it would go straight up the whole time.

A said...

Like I said in my profile, I don't mind civil disagreement, especially when its accompanied by well reasoned argument.

Nonetheless, within six weeks you will be praising my tenacity in staying with my conviction that the trade of our lives is coming, that it will be to the downside and this blog will be on top of it all the way down.

In the meantime, keep those thoughts and comments coming, they will be archived here for some toasts and laughs come next winter.

Anonymous said...

Allan, have you used Prechter's flash service for trades, and how did they work out? I asked for performance history and they said they don't have it (huh?). I take it you expect that service to provide the trade of a lifetime? Thanks

Anonymous said...

Wait a minute, if the trade of our lives is coming very soon on the downside, why should we be holding $10,000 in NNVC (or anything)?

alfaomega said...

"...but is it at all possible that we have indeed entered a new bull phase that will carry this market much higher (we are 550 points off the highs)" ........... yes, a bull supported by a crashed real economy - one could say a sustainable growth ... :)

Anonymous said...


I RESPECTFULLY disagree. This is a bona fide bull market for all of the reasons listed above. There is NO crash coming.

Bottom Line:

Go Long or Go Home

Anonymous said...

Allan, how could a non trader like me profit from a big market downturn,I really love your blog, but I'm just'n old fashioned buy'n hold sixpack joe. Can you throw a few noggin 1-2-3?

Thanks and I really appreciate your generousity!

Anonymous said...

If this projected swoon doesnt happen this fall, will you then be predicting it for next winter, then next spring, then next summer? And all the time missing out on one great bull market? This is exactly what happens to one who stubbornly aligns himself to either a bull or bear market forecast. Try swinging both ways, its much more profitable. Actually, stay with stock picking! Everyone and his brother is a bear right now. BTW, I thought wave 4 was going to end months ago. Could it be a fact that your whole wave count is incorrect?

Addy said...

According to the ideas of Prechter, you can expect strong opposition to the statement the market is going down. Strong bullish sentiment is one of the preconditions for a fall.

Anonymous said...

Toasts and laughs next winter ??!! You lead us all to believe we would be in the middle of Armageddon right now. So which is it? If you're going to do market forecasts, stick with one please and stand behind it. Anyone can surmise that the markets will eventually correct and will most likely, at some point, be proven correct.

TheHammersmith-Etsy said...

True. The following 12months are going to be very exciting. What do people here like to trade (stock)?


Anonymous said...

I guess you are all saying to short the market on this next trade of a lifetime? I unclear about it...will the subscription service be for a stock to buy/a stock to short/ or a market (EFT) to buy/short?

Any ideas?


A said...

Re: Flash Service

Yes, I tried this service about a year ago. Although it performed net positively, my own trading did better, so as far as I was concerned, no added value. This may not mean the same results for you, so it may be worth trying for a short time to see if it adds value to your own trading.

Anonymous said...

I can't say which way the market will go, next week or next month. I do know it's trending up, it could easily trend sideways for months. If Prechter is wrong and the markets continue trending up the next two weeks he is a charlatan. Thanks for blog Allan

A said...


Why hold NNVC into this next decline? Because as so many of you have pointed out, I may be wrong. But more significantly, NNVC owns a transitional medical technology, a new paradigm in the treat of viral-based diseases and they will prosper apart from whatever the global economy is doing.

A said...

Re: Profiting in a Bear market

Learn how to short stocks instead of buying them. Not much of a learning curve. Instead of buying first then selling, you simply sell first and buy back later.

A said...

Re: Armageddon

The first decline will be met with "buying opportunity" mentality, except the decline will extend and expand until the recognition phase asserts itself that something has gone terribly wrong.

A said...

Re: charlatan

If the markets do crash, does that make you a charlatan? Of course not, nor does it make Robert Prechter, or Glenn Neely, or me one either. A charlatan is one who falsely claims to have special knowledge. Prechter has a string of publications, The Elliott Wave Principle and Socionomics in particular, which have become instant classics in technical analysis and psychological economic behavior. He might err on this one forecast, but that does not make him anything other then wrong.

Anonymous said...

I guess the market sentiment on Allan's blog is extremely bulish. It gives a high probability of extreme correction but its also not granted. Robert Prechter in his
Complimentary 10-Page Prechter Interview Available for Club EWI says we can hit the bottom between 2010 and 2016 but nothing is certain. FED is flooding markets with excess money, exceeding its planned targets, so nobody knows how high the markets could really go and for how long. Prechter learned a lot from his big or small mistakes and his forecasts are surely more accurate but still probability is still applied. Its difficult to imagine or believe his forecast that USD will reverse its downward course soon, for example. But who knows, maybe he will be wrong this time.
Allan is kind enough to provide us with his specialistic software signals and his own expertise to tell us what to expect and teach some of us how to look at the market from different angles. Well, its good enough for me, no matter what happens. Lili

Anonymous said...

Bob Chapman mentioned in a recent interview that Prechter has only been right once in 30 years with a wave prediction.
Why do so many bother giving Prechter the time of day, he truely is a looser kept going by chart die hards. Good grief, really look at Prechter records. BTW, he is now saying the dollar will rally hard.

Anonymous said...

In a wave 3 advance up, market sentiment can and will get extremely bullish....its what constitutes the recognition wave.

Anyone who follows Precther by the way is setting themselves up to miss some of the great bull markets in history. But, the less on board, the better. So I guess Precther is good for keeping most out of the market.

A said...

Re: Prechter

If you search my archives, you will find criticism as well as praise for Robert Precther. Thus I consider myself somewhat objective. Prechter nailed the 50% decline, 800 S&P points ending in March, 2009. He then called for a multi-month rally turning everyone bullish again. A second nail. Now he is calling for the top of the rally and a nasty Wave 3 down.

That's two spot-on calls for over 1,000 S&P points in less then two years........yet "Bob Chapman" claims Prechter has only been right once in 30 years.

There are a lot of wannabe famous market gurus out there, to the one insanely jealous and dismissive of Robert Precther. They lie about his record to make him look bad, then believe their own lies making themselves, Bob Chapman included, look like a bunch of sour losers and deceptive punks.

Let's keep to the facts and evaluate Precther and anyone else objectively and honestly, or we are just clashing egos for the sake of clashing egos. I would hope we are all above that.

Knowledge is to be shared and absorbed, not ridiculed with envy bordering on hatred.


Anonymous said...

Hummm, your trading results were as good or better than Prechter's service - great! Where do I sign up? Seriously, why not have a pay section where you post (more of) your moves? If you think there will be a trade of a lifetime, but prefer yours over Precter's system, then just tell me how much you want for that trade :)

A said...

Re: My trades

You'll have to settle for my free analysis, from which my trades can be implied with clarity and resolve.

Anonymous said...

Wait, you dangle "trade of a lifetime" in the next few weeks and recommend Prechter, then when pushed you prefer your own system. Therefore you believe you can achieve or beat the trade of a lifetime? Well ok, I'll continue following your blog looking for that "implied" trade (of a lifetime). I'm rooting for you!

A said...

Re: dangle

Well you've lost me, I don't what the hell you are talking about and have better things to do with my time and this blog then answer dysfunctional inquiries.

Anonymous said...

Allan, lets call the recent market activity " the borrowed cash for clunkers rally". What a great country we live in! Oops, sorry, cash for clunkers ended today, and maybe we sucked the next few years of natural new auto demand into this "cash for clunkers" boondoggle. So who will be the first guy/gal to step up and pay full price for a new car tomorrow? Down she goes, IMHO Allan. Warmest regards from NYC/ joe

Anonymous said...

allan, got your point on Precheter. I really don't know that much about him or his record.

Regarding the direction of the market, for me I have not seen (hardly) any reforms put into place that will off set another huge drop in the market. Banks are sick, once you take out the market to market rule. I personally do not see how the system can sustain itself when greed and fear are the only factors in the mind of the majority of investors (Allan not included) I have no doubt that the Goldman Sachs of the world are unloading their holding to the innocents they have drawn into this fake recovery. IMO, beware bulls the stocks you buy today are the ones the brokers are unloading.

Allan, got any more stock picks for us? I'm looking to sell my TGB soon, since its price will not hold a severe market correction.

Anonymous said...

Some would say that the torrid rally off the failed head and shoulders "top" is a Wave 3 and we are now in the "recognition phase" that this is not just a bear rally and the world is in fact not coming to an end.

I've been bullish since the end of March and remain so, though I do think we are overdue for a correction. I have no idea when it will happen but think it will at worst go down to the 875-900 level. Call me crazy but just like the credit bubble fueled bull of 2003-2007, before it's all said and done I think this market is going to go higher than anyone expects.

That being said I don't deny that we remain in a secular bear market, and that it will re-assert itself eventually.

Just my two cents.

Trader Dave

Anonymous said...

Putting Prechter down doesn't make him wrong and doesn't prove the bulls right. If everybody wants to believe that the markets are going to rally indefinitely and somehow a new economy will dawn, then I say leverage up and bet your life. However, if you are like me, you see more of the stuff going on that tanked this economy in the first place. Debt hasn't been deleveraged yet, and the American consumer isn't going to return to fill that 70% void in our economy that they used to fill, so no recover is in sight.

When so many who follow the markets (like the people on this blog) are indignant at even the notion of a down leg, sentiment among the general public has got to be euphoric. We all know what that means.

The really interesting question is whether the government can wring a little extra bull out of this dishrag and hold back the downleg until the November sales figures come out. The clothes come off the emperor when nobody shows up for holiday sales. That will really cause a panic.


Anonymous said...

We are indeed at the point of a massive correction. Take a look at the bullish sentiment for financials ($bpfina). Its impossible to comprehend that the financial community is in good shape. 300-1000 banks are severely distressed and under-capitalized. Sheila Bair, FDIC has been ignored by the main stream media with her assessment of the problem.

High unemployment, record deficits, state and local bankrupcies, record foreclosures and inept politicians will accelerate this horrific downside correction in the short term.

Just follow the price for your entry point to the short side. Thanks. Dave

Lasertrader said...

Here and throughout the Blogosphere people quote the "gurus" without really knowing how bad they are. Here is a useful resource next time you want to attach yourself to the guru of the day

I myself only follow my charts and nobody elses. If you take the time to learn how to read charts and patterns along with supply and demand and filter out all the guru talk you would be amazed at how good your own calls really are.

Anonymous said...

One of the things that stood out this weekend when I looked at the various global market indices was this:

The countries where the government has been pumping massive levels of debt into the system (e.g., US, UK, Germany) are trending higher. Those which are not, or have started to pull back (e.g., China, Australia, Canada), are looking very toppy.

I contend that it's only massive debt-creation that's pushing stock prices higher. And, according to the figures in John Mauldin's letter this weekend, the debt-to-GDP ratio is pushing toward 4.0 in the US right now. That is, obviously, unsustainable, and will have to collapse like every debt bubble in history.

I have no doubt that the government can push the Dow to 100,000 this year---if they decide that's what they want. The problem comes when the herd realizes that there's nothing but hot air under stock prices. At that point, that great sucking sound you will hear will be the Great Bubble Machine sweeping up all the worthless paper.

Anonymous said...

I do not agree with those who view the March lows as "multi-generational lows" and I think another big downleg will come. I just think it's going to come from higher levels than this.

I totally agree with all the comments about the debt bubble. As one example I was talking to a friend today about the Cash For Clunkers program. We're encouraging to people to trade in cars that they don't owe any money on so they can buy new cars that are financed with you guessed it.... debt! And the only reason they're doing it is because the govt is giving them a 4k rebate! Crazy... this govt is doing everything it can do to get people to take on more debt.

I totally agree that the debt issue is going to come home to roost eventually and it will not be pretty. I just think that the debt bubble will like all other bubbles run farther and longer than anyone expects. It was really hard to be a bull in March, and it's hard for me to be one now, but I think this party's gonna run a little longer.

By the way, got to give kudos to Allan even though I've been in disagreement with his premise (or at least the timing of it). You trusted your system and stuck with what got you here. You didn't waver or flip-flop in a panic, that takes some guts and I have to respect it.

Trader Dave

Anonymous said...

"The problem comes when the herd realizes that there's nothing but hot air under stock prices."
- Bob Carver

I agree with BC, but I think this time it IS different. Never before has a rally accompanied such a bad economy. The ramifications of this is fully half of the herd already knows this is nothing but hot air, but doesn't care because they are ready to bolt, and of course the other half is too stupid to sense their danger. Sure, they will all stampede together, but they just may stamped faster than ever before in history. You may not be able to get out of your long positions this time. There won't be any buyers and they may have to halt trading, thereby ensuring huge gap downs.

I agree with Trader Dave. The USG will try to keep the bubble going as long as it has to. But this post led me to the question, at what point is the USG likely to feel they can stop pushing?

So far, their focus has been on the big banks. They clearly indicated that they will do anything to save them. GM and all the other pork are just that, political paybacks and pork. But they are sincere about the banks.

So, the canary in the coal mine is the top banks. If enough of them are in danger when the next stampede comes, the government will fight to uphold the market. But if enough of the banks have unwound their positions, and are in the lifeboats, they will row away and leave everyone else to drown, taking comfort that their survival is for the common good.

It's not an issue of correct or incorrect, because Prechter's analysis is spot on. It's an issue that they keep changing the rules as we go. Just ask the Hunt brothers what can happen when the rules change in mid-game. Nobody knows how long this will take.

My crystal ball says we make it to early December, but I only picked that month because I think it is impossibly far away and the holiday sales are bound to disappoint.


Anonymous said...

Prechter is spot on.....hahahahaha