Saturday, December 19, 2009

Glenn Neely's Forecast of a 20-Year Bear Market

Glenn Neely discusses his January 2008 forecast, in which he accurately predicted the market was embarking on a 4- to 6-year Bear market. In addition, Glenn discusses why, as the current Wave structure continues to unfold, the U.S. economy is facing an overarching 20-year Bear market. 

"We’re finally starting to accept it as a reality that the boom period, for 20 years from 1982 to the highs in 2000 and 2007, is now finished. The glory days, economically speaking, are finished for awhile.
"It’s going to be a re-assessment of the way people think about the future. They’re going to be much more concerned about spending, hoarding money, trying to keep the jobs they have, and cutting back on all kinds of luxury spending like vacations, cars, boats, trips, houses, and everything else. It will be much more survival-oriented.
"Unfortunately, that’s going to get even worse as 2020 comes around. This is just the beginning of the bad psychology that’s going to be unfolding for a long time.

".......under Wave theory, there are different levels of bear markets. The whole big-picture bear market started at the high in 2000. That’s going to go on for about 20 years. The smaller bear market, within this larger bear market, began at the high in 2008, and that will go on for about four to six years.
"In other words, after we realize we’ve survived 2012, we’ll probably get a really nice rebound, and the stock market may even go back toward the highs of 2007.
"Economically speaking, things still aren’t going to be great for a long time. I suspect the only way the stock market is going to be able to recover back to the highs of 2007 is because of inflation. The actual values are less, even though it appears that we’re at the same level.
"I think we’re going to go through a deflationary period, which we can go into some other time. We’ll be in a deflationary period for probably the next two to three years. After that, we may have some mild inflation that occurs that will allow the market to go back to the same highs numerically, but the value will actually be less.

"It’s the idea that $100 now buys only one-tenth of an ounce of gold, whereas 50 or 100 years ago it bought three ounces of gold. It’s the same numerical value, but it’s worth less."

Click here for full transcript of November, 2009 interview

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Anonymous said...

20 year bear market. What a dope.

Tom D said...


Thanks for the kind remarks under the NNVC blog post.

Perrin Gower who posts at WW and elsewhere recommended Neely's big book to me in the early 1990's. In fact Perrin is on the back of the book jacket giving a few words of praise to Neely and the book. Neely is the only Elliottician I have confidence in. And that's "only" because he has been right so many times on the big directions of the markets. He was long most of the time from 1982 to 2000 with a few famous time-outs. I well remember when he made a live guest appearance at Avid Chat in August 2000 and said we were only a few weeks from a bear market collapse, which we were.

He got long a bit early in late 2002 and short in January 2008, and long in March 2009. He's been trying to get and stay short now for several months and keeps getting stopped out, but I'm sure he'll be right eventually. He does it right, and when he gets it right he makes so much money for so long that a few stop outs won't have mattered. My own stuff is getting closer to a sell signal than it has been since mid October, and if and when I get the signal, I'll feel very comfortable going flat or short knowing that Neely is hyper-bearish.

Anonymous said...

Such is the nature of grandiose projections that they are subject to dissection and discussion by people of all mental faculties.

Including inferior ones.

But as one Nikolai Kondratieff once said...nature cannot be over-ridden either out there on the Savannah or on the ticker tape of the world financial markets.

Thank you Allan for posting that.

Tom D said...

I should add that according to the time box of the move up from March on a recent Neely chart of SPX, time for a decline could run out in about a month (I'm eyeballing it).

A said...

From the current issue of Elliott Wave Theorist (12/18/2009):

"Because almost all debt today is bad, and because Primary Wave 3 downward in stocks is imminent, social-mood change in 2010 will produce more financial destruction than the world has ever seen."

Unknown said...

There isn't just one future. We have a confluence of forces. This is a economic stability view, e.g., past forces and behaviors created this forecast. Things have changed. What will be facinating is watching the market unfold and understanding which past data is no longer valuable, and which new data is critical.

Anonymous said...

Hey Allan how about putting up a Christmas-themed blog. We are a Christian country after all.


Anonymous said...

Singularity event. As we use to say in the 60's "It'll blow your mind man!"

Anonymous said...

Paul, Go to Disney for a Christmas-themed blog. This is a trading blog.
Merry Christmas

Anonymous said...

On 6/17/2009 Neely predicted the market would decline 50% within 6 months.Forecasting is a dangerous game.

Anonymous said...


Yes this is a trading blog but all good traders are built from discipline and GOD.

As Allan has said Christianity is a hallmark and cornerstone of this board and at this time of year we should all give thanks by acknowledging that.


Anonymous said...

I remember in August or September there was someones long post in your blog regarding Neelys revised stance on markets. I cant find it anymore. It stated that Neely changed his bearish view and said we would not see new lows in 50 years. It looks like Neely changed his mind again or the old post I mentioned about was just someones hoax ?
Allan, do you remember that old post? If it was real Neelys revised stance that time , is it possible he revised it again in such a short time? Could you please make a short comment , maybe I misunderstood the old post (but just cant find it anymore). Thanks. Lili

Anonymous said...

Glenn Neely "accurately predicted the market was embarking on a 4- to 6-year Bear market."

I'd like one of you bearish geniuses to explain to a layperson how this is possible. What I mean is, how can someone accurately predict something that has not happened yet? Don't we have to wait at least 4 years from the beginning of the Bear market in order to analyze the accuracy of this statement?

Happy belated Chanukah,

Scotty G.