U.S. likely to lose AAA rating before 2011: Prechter

[LargoWinch]

I have to admit that I am unfamilliar with Prechter and the Elliot Wave theory outside wiki (any input/background/comments appreciated).

Regarding the article at hand and not to "beat on a dead horse", I think that the rating agencies work is unreliable at best (no offense to the very hard working employees of those firms, some of which my dear friends here in Toronto).

Mon Jun 15, 2009
By John Parry
NEW YORK (Reuters) - Technical analyst Robert Prechter on Monday said he sees the United States losing its top AAA credit rating by the end of 2010, as he stuck by a deeply bearish outlook on the U.S. economy and stock market.


Prechter, known for predicting the 1987 stock market crash, joins a growing coterie of market heavyweights in forecasting the United States will lose its top credit rating as the government issues trillions of dollars in debt to fund efforts to bail out the economy.

...

Full Article here from Reuters.

[Ghent12]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I forget what he said verbatim, but Peter Schiff said that his was an extremely obvious move that comes far too late to do anyone any good.

[Raz]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I subscribed to the Elliott Wave Theorist from 1984 - 1991, and I traded snail-mail with Robert Prechter in 1987.
(I have one of his letters to me framed and displayed in my office.)


His cousin Joe Prechter worked for the SEC back then and I met him before I corresponded with Bob.
Robert Prechter is extremely intelligent as well as a very personable man. He is quite friendly and seems to have a decent amount of humility.

His only mistake, in my opinion, is becoming a "slave to the wave", by insisting on one interpretation alone after the Crash of 1987.
It caused him to miss several years and huge gains made in the equity markets during the early 1990s.

[LargoWinch]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I subscribed to the Elliott Wave Theorist from 1984 - 1991, and I traded snail-mail with Robert Prechter in 1987.
(I have one of his letters to me framed and displayed in my office.)

That is pretty neat...

I want one from EJ!

[ltullos]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I am current subscriber to Elliott Wave for just over a year and have found most calls to be very correct, including drop on Monday which I've been able to profit from. Prechter continues to call for significant deflation as the current bear market rally (primary wave 2) ends with market plunging during primary wave 3 which will make last Oct look mild. Many of the nuances of picking out the minor waves are too much work for me to follow (especially with all of the corrective patterns), but I've found that focusing just on the larger ones and major turning points have been accurate enough to be profitable even for a newbie trader. Even better, I've been able to avoid losses on all trades except USD rally which was undercut this spring by Fed's announcement of buying treasurys. Overall, I find Elliot Wave Theorist and Short Term Updates to be a nice complement & balance to iTulip.

[FRED]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I am current subscriber to Elliott Wave for just over a year and have found most calls to be very correct, including drop on Monday which I've been able to profit from. Prechter continues to call for significant deflation as the current bear market rally (primary wave 2) ends with market plunging during primary wave 3 which will make last Oct look mild. Many of the nuances of picking out the minor waves are too much work for me to follow (especially with all of the corrective patterns), but I've found that focusing just on the larger ones and major turning points have been accurate enough to be profitable even for a newbie trader. Even better, I've been able to avoid losses on all trades except USD rally which was undercut this spring by Fed's announcement of buying treasurys. Overall, I find Elliot Wave Theorist and Short Term Updates to be a nice complement & balance to iTulip.

Have you ever used a spreadsheet to add up all of your gains and losses fom trades using Elliot Wave?

[ltullos]

Re: U.S. likely to lose AAA rating before 2011: Prechter

Have you ever used a spreadsheet to add up all of your gains and losses fom trades using Elliot Wave?

Absolutely. My engineering background makes me anal about spreadsheets and fact-based data analysis! YTD I'm net positive $27.3K with 11 trades positive (29.3K) and 3 trades negative (-2.0K). Throw in my $177/quarter subscription cost & I'm up $26.5K. As I said I'm a newbie trader and have approached this cautiously as I learn and gain confidence. My biggest mistake to date is not being committed to going in for larger trades. I've learned to keep notes on entry & exit points of each trade to record my understanding of EWT at time of trades, including those that didn't execute because my limit orders were set too low or high. Point being to make sure I'm learning with each trade what I missed out on and to improve my discipline.

What EWT has taught me the most is to ignore the news and pundit's reasons for the day for market moves as most of it is meaningless and only detracts from understanding the real market psychology. I now watch CNBC only for entertainment and come here and to Prechter for understanding. Despite a lot of apparent contradictions between the two (particularly inflation vs deflation), I'm finding the combination is working for me and will keep both subscriptions going.

[touchring]

Re: U.S. likely to lose AAA rating before 2011: Prechter

Prechter continues to call for significant deflation as the current bear market rally (primary wave 2) ends with market plunging during primary wave 3 which will make last Oct look mild.

Interesting, what did Prechter say about wave 3?

[ltullos]

Re: U.S. likely to lose AAA rating before 2011: Prechter

Interesting, what did Prechter say about wave 3?

Quoting from April Theorist ....

"[Primary] Wave 2, regardless of it's extent, should generate substantial feelings of optimism. At its peak, the President's popularity will be higher, the government will be taking credit for successfully bailing out the economy, the Fed will appear to have saved the banking system, and investors will be convinced that the bear market is behind us. Be prepared for this environment; it will be hard for most investors to resist. But beware: [primary] wave 3 - the steepest portion of the steepest wave - will be the most intense collapse in stock prices in nearly 300 years. The perverse result of wave 2 will be to get people even more heavily invested than they already are, just before wave 3 starts."

current projection is that current selloff which started Monday is not yet start of wave 3, but instead final zig-zag of wave 2 which ends in one last push up late summer or early fall.

As an aside, I've historically been more tuned to fundamental analysis and dismissive of TA. However, it is readily apparent that fundamentals are now broken and market is moving on pure psychology (fear & greed) more than I've ever seen. However, as I've come to learn, this seems to be intrinsic to certain cycle and super-cycle waves.

Final disclaimer: I'm trying NOT to shill for anyone, just stating as I understand and see it.

[touchring]

Re: U.S. likely to lose AAA rating before 2011: Prechter

As an aside, I've historically been more tuned to fundamental analysis and dismissive of TA. However, it is readily apparent that fundamentals are now broken and market is moving on pure psychology (fear & greed) more than I've ever seen. However, as I've come to learn, this seems to be intrinsic to certain cycle and super-cycle waves.

Final disclaimer: I'm trying NOT to shill for anyone, just stating as I understand and see it.

Thanks. I agree with his analysis, especially if you consider the flu problem worsening in fall. Wave 3 is almost guaranteed by winter.

[Kadriana]

Re: U.S. likely to lose AAA rating before 2011: Prechter

Thanks. I agree with his analysis, especially if you consider the flu problem worsening in fall. Wave 3 is almost guaranteed by winter.

Swine flu threatens green shoots.

http://www.stuff.co.nz/business/opin...s-green-shoots

[Rantly McTirade]

Re: U.S. likely to lose AAA rating before 2011: Prechter

In deference to swine flu, perhaps we should begin speaking of
'green snots' instead.:p

[ddn3f]

Re: U.S. likely to lose AAA rating before 2011: Prechter

[quote=ltullos;104774]Quoting from April Theorist ....

current projection is that current selloff which started Monday is not yet start of wave 3, but instead final zig-zag of wave 2 which ends in one last push up late summer or early fall.

quote]

I agree with this forecast.

[Starving Steve]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I subscribed to the Elliott Wave Theorist from 1984 - 1991, and I traded snail-mail with Robert Prechter in 1987.
(I have one of his letters to me framed and displayed in my office.)


His cousin Joe Prechter worked for the SEC back then and I met him before I corresponded with Bob.
Robert Prechter is extremely intelligent as well as a very personable man. He is quite friendly and seems to have a decent amount of humility.

His only mistake, in my opinion, is becoming a "slave to the wave", by insisting on one interpretation alone after the Crash of 1987.
It caused him to miss several years and huge gains made in the equity markets during the early 1990s.

Not only is Bob Prechter "a slave to the wave", but he is also a perma-bear. So his negativity drones on for decades and is meaningless and useless.

Naturally, in 1987 Bob Prechter was right. But a stopped clock is also right twice a day.

I no longer pay attention to Bob Prechter, his constant negativity, and his stupid Elliot wave. I look at market behaviour, especially at sentiment extremes. For example, gold's behaviour right now at extreme gold bullishness is interesting. Why is gold not breaking-out to a new high? What is gold trying to communicate?

[metalman]

Re: U.S. likely to lose AAA rating before 2011: Prechter

I have to admit that I am unfamilliar with Prechter and the Elliot Wave theory outside wiki (any input/background/comments appreciated).

Regarding the article at hand and not to "beat on a dead horse", I think that the rating agencies work is unreliable at best (no offense to the very hard working employees of those firms, some of which my dear friends here in Toronto).

um, so... prechter thinks the usa credit rating will drop and the dollar will strengthen.... riiiiiight.

these guys have him nailed...

http://www.zerohedge.com/article/robert-prechter-dollar

Prechter has probably the worst track record of anyone on the planet. That's why CNBC likes to bring him on, to discredit anyone with a legitimate bearish view. Prechter falls for it every time.

Prechter: blah ba blah ba blah ba blah ba blah..... A frickin' broken clock, and not even a very good one at that.

here is prechters record.. alf has killed him on his own elliot wave theories
http://www.gold-eagle.com/editorials...eld112408.html


For those too busy to read the article here is one juicy quote:
"In August 2003 the gold price was in the region of $350 and there were a number of conflicting views about the future direction of the gold price. Robert Prechter, for example, was predicting a move to below $253 and possibly below $200."
HAHHAHAHHAHAAHAAHAHAHAHAHAHAA!!!! I mean the guy has some nerve issuing all sorts of "recommendations" and "predictions" all over the internet and TV. He should be especially banned from predicting anything about the gold market - ever again.


etc, etc...