Prechter: March Lows will Break!

Next Wave Down will be Bigger and March Lows will Break

• Prechter was on Bloomberg last night but we were away and didn't manage to watch what he had to say. Bloomberg didn't make available the complete video of last night. However, I believe what he had said last night was pretty similar to what he said in the above techticker video [6], published on the 11th.
• 25 February, 2009: suggested subscribers to cover, after the markets breaking the 2002 lows.
• Predicted the present rally, and Prechter regarded it as a counter trend move or a bear market rally, with the major trend down. The exhaustion of such a rally can be tricky to pin point.
• S&P had retraced > 38% of decline from 2007 peak to march low.
• The Dollar had bottomed. [This is contrary to our view. In fact, we think the Dollar had made a peak following the global deleveraging [5].]
• Big Dollar rally ahead = bad news for commodities, stocks.
• We are in a deflationary environment, very much similar to 1929 and 1933. [We never bought into this argument of Prechter [3]. Glenn Neely [2] too is making a similar prediction. The legendary Nouriel Roubini [1] was also warning us of deflation -- which we didn't buy into either at that time. bhc investment has been on the record for going against all these ideas all along. Though we are all bearish on stocks, our fundamental view of the outcome is very different. We think inflation will be the ultimate outcome, a view we have been holding on to since the beginning. While Warren Buffett [4] is certain of inflation in the future, the oracle of Omaha still thinks stocks are the best investment.]
• Forget "sideways" for stocks. Think DOWN!
• Dollar rally will take commodities down.
• We will DEFINITELY break the March 2009 lows! This bear market will extend well into the next decade!!! This move since the 2002 peak is one that only happens in a few hundred years.
• Prechter also correctly predicted the 1987 crash.
• Prechter also correctly called the roaring bull market since 1978.

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References:

1. The Ultimate Test
2. Boon vs Glenn Neely, Part II
3. Boon vs Robert Prechter, Part VII
4. I am not a Pessimist! Part IV
5. Is Been a While...
6. Bob Prechter "Quite Sure" Next Wave Down Will Be Bigger and March Lows Will Break