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Bob Prechter: My Charts Say DOW May Plummet To 2,000
Posted Sep 20, 2010 04:49pm EDT by Henry Blodget in Investing, Commodities, Recession, BankingAn ominous pattern forming in the stock market may be telling us the DOW is about to plummet to 2000-3000, says Robert R Prechter, Jr.
Prechter, who writes a market letter for Elliott Wave International, is no stranger to apocalyptic forecasts. For the past year or two, he has been steadfast in his prediction that the market is on the verge of a historic collapse. The timing and depth of this crash has varied--earlier this year, Prechter suggested the DOW might fall to 1,000, and more recently, he said we were looking at the worst bear market in 300 years--but he hasn't wavered in his conviction that we're due for major pullback.
One cause of Prechter's concern is a technical pattern called a "head and shoulders top." Historically, Prechter says, this pattern has often preceded extended bear moves. Prechter thinks the left-hand "shoulder" of this pattern was the market peak in early 2000, the "head" the higher market peak in 2007, and the "right shoulder" the recovery we're enjoying now.
If the pattern is followed by the same pullback Prechter has seen in other eras, Prechter says, the DOW could fall to 2000-3000.
Fortunately, Prechter says he is not predicting that kind of crash. He's just warning about an upcoming severe pullback in stocks.
And he also sees similar doom in the forecast for high-yield bonds, gold, and other commodities.
See Also: Bob Prechter Says We're On The Verge Of The Worst Bear Market In 300 Years.
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176 comments
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0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentpeter Tue Sep 28, 2010 12:51 pm EDT Report Abuse - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentdavid Report Abuse
He said more than a year ago we were at a top and THE drop was coming soon. Now he says it will happen in 6-7 years! It's not about the stock market, it's the dollar. Deficit spending will destroy the $ and our economy
- 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentOrville Report Abuse
The number is irrelevant; the point is we have become disconnected from what is real. Coming back down to earth is a good thing. Buy yourself a learning curve, buy yourself some honesty, and grow. Energy is matter and there is little energy in a digital credit, compared to real work.
Paper is only a representation of what is real, those that are capable have real worth, and those with mere knowledge are a part of the perpetual paper scheme...
The further detached we become from the natural world, from physical reality, the greater the return to zero... And many of us deserve zero... - 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentJohn G Report Abuse
Wasn't Prechter predicting Dow 1000 a couple of months ago? Now he predicts Dow 2000... he's getting bullish!
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1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 2 users disliked this commentA Yahoo! User Report Abuse
First of all, Elliot Wave is voodoo. Secondly, where we are at right now is much more like October 1975 than anything else. Same pattern. And looked what happen there.
Not that it matters.This is all @#$%. It's not how the market trades. - 2 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 2 users disliked this commentmichael Report Abuse
Remember that when the Dow was at 14000 and again at 6000, the sun still came up, you are still alive. Just because the Dow could go that low would not mean that the end is near. Actually, that would mean that we have successfully de-leveraged and have a real base to build on and have true growth, not this govt. backed scam we have now. Scary short term, positive and bullish long term.
- 2 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 7 users disliked this commentCowboy Mike Report Abuse
If he is right, we will all be begging in the streets. If the teabaggers take over it probably will go there. They are just Herbert Hoover born agains.
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0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentA Yahoo! User Report Abuse
This guy is very smart. He knew to be in cash the last decade. I know it sounds so stark to have the dow at 2,000 but that is the elliot wave theory in action. It clearly is a head and shoulders formation and knowing that, the market will break at the neckline and go straight to hell is some great advice. I like this guys idea of waiting it out and buying in the future when it is the right time to buy. I knew this was the case with the real estate bubble when people were bidding on houses in 2004 - I knew that wasn't the right time to buy. The time to buy real estate is when there are a glut of condos on the market. People are stupid everywhere..
- 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentSharnhorse Report Abuse
If Prechter is right, would this negate the official end of the recession? I think a pullback is definitely imminent, but I dont think this will nearly be as bad as he thinks it will be.
- 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this commentcalsurf Report Abuse
so the dow will crash to 2k and gold will be lower ? LOLZZZ ,that makes my decision on this guys prgnostication easy .....NEXT !! uh dude charts are lagging ,you can make em signal what ever your outlook ,fail.
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