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Surely, This cannot be right

(I find the forecasts useful anyway, as a part of an overall market understanding)

 

And I can't for the life of me figure out why Prechter has so many groupies with his horrific market timing track record.

 

"Newsletter tracker Mark Hulbert has been documenting Prechter's investment trading predictions and picks since 1985 so he now has a nearly 25 year long track record which can tell us whether you should trade on his predictions or not.

 

Here's how Prechter's trading advice has done from 1/1/85 through 5/31/09 versus the broad U.S. stock market average (Wilshire 5000 index) according to Hulbert's analysis:

 

Annualized Return:

Wilshire 5000 Index + 9.7 percent

Prechter's Trading Advice -15.4 percent

 

Total Return:

Wilshire 5000 Index + 857.1 percent

Prechter's Trading Advice - 98.3 percent

 

The underperformance of Prechter's newsletter is nothing short of astonishing and stunning! On an annualized basis, Prechter has underperformed the broad U.S. stock market Wilshire 5000 index by a whopping 25 percent per year! Here's what Hulbert's analysis shows would have happened to $100,000 invested according to Prechter's investing trading advice versus the Wilshire 5000 U.S. stock market index:

 

$100,000 Invested (1/1/85-5/31/09):

Wilshire 5000 Index $957,100

Prechter's Trading Advice $1,700 "

 

Posted by: kloughr

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Here's what Hulbert's analysis shows would have happened to $100,000 invested according to Prechter's investing trading advice versus the Wilshire 5000 U.S. stock market index:

 

$100,000 Invested (1/1/85-5/31/09):

Wilshire 5000 Index $957,100

Prechter's Trading Advice $1,700 "

This is great stuff.

 

Good luck to everyone who listens to Prechter's advice.

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This is great stuff.

Good luck to everyone who listens to Prechter's advice.

 

...You mean: For people like Paul Tudor Jones, who uses Elliott Waves, and part of his trading

The Film: Trader - Paul T. Jones bets on a chart similarity with '29

This film takes us into a top trader's mind in late 1986-1987:

http://www.greenenergyinvestors.com/index.php?showtopic=8093

 

...Or our own Douche Dore, who is traveling around the World on a windfall he may from following

Prechter's trading ideas in 2008.

 

I suppose Prechter cares little for the way in which Hulbert compiles his statistics,

because his ideas are far better than that measure shows

 

BTW: No ones trading ideas show be followed slavishly.

My advice: Read them, think about them, use them. But in your own way.

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I suppose Prechter cares little for the way in which Hulbert compiles his statistics,

because his ideas are far better than that measure shows

On FSN he was a good talker. But thinking about his arguments, I had to mostly reject what he said.

 

BTW: No ones trading ideas show be followed slavishly.

My advice: Read them, think about them, use them. But in your own way.

But that waters it down. Is anyone in academia taking EWT seriously?

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From The Elliott Wave Financial Forecast, October 30, 2009:

 

"....The recent strong downside breadth as well as the downside leadership from the higher-beta secondary indexes indicate that the most intense phase of the bear market to date is starting.....This time, all of the more speculative stock indexes, including the S&P Small Cap 600, the Russell 2000, the Value Line, and the NASDAQ, are charging ahead on the downside; this old fashioned stock behavior is probably an early sign that the optimistic bias of the past decade is finally about to yield."

 

/see: http://allallan.blogspot.com/

 

== ==

 

Yelnick's "Last Chance":

 

The wave structure in the Naz and S&P seem fairly clear: we have concluded a five-wave down move and now should have a wave 2 bounce. We might see a gap down Monday morning as the retail investor panics a bit this weekend and puts in sell orders; but either that day or Tues should show a sharp reversal. The STU notes that Wed is FOMC day, and the market may appear to rally into that day waiting for the FOMC report (and any interest rate changes) before fading after.

 

That rally is your last chance to get out. It should go back at least 50%, and that means it should kiss the trendline goodbye at around the Sp1061 pivot level one more time. (Math works simplest if we have a 15 or so pt drop Monday before the reversal: 1101 top to 1020 then 50% rally gets back to 1061.)Then a wave 3 down with higher intensity and a greater fall.

 

The wildcard is the Dow, which has not yet confirmed the break. Its lower trendline runs around 9600 on Tuesday and is rising about 20 pts a day. Interesting is that the STU has an alt count for the Dow which is much more treacherous and bearish. The implication is a minor bounce and then a deeper fall without the kiss goobye moment, A fickle mistress, that Dow! No more last chances!

 

/more: http://yelnick.typepad.com/

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ALTERNATE EWAVE COUNT

 

I think that many miss the point of subscriptions to services like EWI et al. If you do it because you think you will make a ton of money following someone else, then you are indeed a fool. Trading is 80% money management, 20% selection. Every day before I begin battle with the markets, I ask myself - do I want to be right or do I want to make money. I subscribe to GMP (the monthly roundup). I am not particularly interested in any count of theirs - I know from experience that if I hold a bias then I will naturally want to seek confirmation from other sources so I have taught myself to ignore what everyone else is saying.Why I subscribe is simple - I neither have the time nor the resources to obtain some of the data, statistics or otherwise observations that are oftem included. By way of case in point, this weekend's GMP contains a very good summary of the Goldmans history and charts various events against GS price. Will it help me make money - no. But I find it interesting and if I was further interested and wanted to trade it I would be encouraged to do my own further research. For those who consistently wish to denigrate the work of others, it is more a sad reflection on them.

 

I am a short-term trader but have a fascination with longer-term cycles and so play around with that when time permits (just for fun) - FWIW I am still very confident that my longer term outlook of the US being in a C wave (off 2007 top) which is unfolding as a diagonal triangle will be correct.

 

We have just finished the first wave up (A) of an ( A)-( B)-( C) second wave of the diagonal triangle - the (B) wave should meander down into third quarter 2010 before a very sharp © wave takes us up into mid 2011. Then we get the third wave of the diagonal triangle down which many will mistake for the big P3. This should complete in 2012 before a rise into 2014 (4th wave with the obligatory overlap - the point of recognition for EWI that it is a DT) and panic to the final bottom with the usualthrowunder to complete the diagonal triangle in 2016. Longer term and medium term cycles all line up and increase the confidence. I do believe a DT will fit better than EWI current interpretation.

 

/see: Posted by: Perigee | Friday, October 30, 2009 at 10:08 PM

http://yelnick.typepad.com/yelnick/2009/10...n.html#comments

 

2/

So many pundits and "gurus" looking for the market to fall apart here. Even CNBC paraded a ton of BEARS on their broadcast after the market closed on Friday. "Last Chance to Get Out"???

Hardly.

 

Prechter and all of his "followers" will clearly cheerlead any correction as the beginning of P3, yet if the market finds support in the next 10-20 SPX points and rallies back up above any regular fibonacci retracements the Elliott wavers will simply fall back on yet another one of their ALTERNATE COUNTS just as they have since early August . . . telling everyone to continue shorting the market even as it makes new highs.

 

Interestingly enough, with all of the talk about US Dollar strength on Friday as the culprit behind the "sell-off", the Euro still didn't take out Wednesday's low and is still being supported by the 40 day MA.

Posted by: Michae

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FURTHER DOWN than some think ? (SPX-300/450)

 

Reviewing the blogs, I see a lot of calls for 980ish and 930-950ish. I am in sync with Tony calling for a test of 869 in wave 1 of C/3.

 

First, the failed H&S pattern at 869 and all the gyrations above and below 875 make that area the most critical to any long-term bull argument, and, historically, the tops at 944 and 956 are likeliest to be broken and broken by more than 1% even if a subsequent bull run ensues.

 

Second, if you believe SPX is not in a new bull market and if you believe SPX will break the 667 low, a test of 850-900 is more likely than 930-980, because a common multiple for an impulsive wave is 2x-3x wave 1. A 200-250 pt drop to 850-900 would equate to a total move of 2x-3x that down to 350-700 whereas a 120-170 pt drop to 930-980 would only equate to 590-860. Yes, a drop to 930 puts SPX on the edge of being able to break the 667 low but only on the edge nonetheless. Case in points...

a. SPX wave 1 in 2007 was 1576-->1256=320pts while the entire bear drop was 1576-667=909 and 909/320=2.8x wave 1.

b. SPX wave 1 of 1 from Oct 11, 2007 was 1576-->1406=170 and (1576-1256)/170=1.9x.

c. SPX wave 1 of 3 from May 2008 was 1440-->1200=240 and (1440-741)/240=2.9x

d. SPX wave 1 of 5 from January 2009 was 944-->804=140 and (944-667)/140=2.0x

e. SPX wave 1 of A from the Sep 1929 top was 381-->325=56 and (381-199)/56=3.3x

f. SPX wave 1 from March 2003 was 789-->1015=226 while the entire bull run was 789-->1576=787 and 787/226=3.5x (the difference in this one is that it is a bull market impulse and looking at the 2002 to 2007 bull run or even Tony's historical chart from 1929, you can see bull market impulses typically see a much larger multiple of wave 1 than 2x-3x)

So, 2x-3x is a good estimate for bear markets with outliers of course and 850-900 for wave 1 has a lot better chance of breaking 667 than 930-980 for wave 1.

 

Third, if you take a step further back and try to calculate a C/3 wave drop from 1101 based on the A/1 wave from 1576, you also arrive at a sub-600 bear market bottom which makes a deeper drop to 850-900 a lot more likely than 930-980. Wave A*1.5x to 2x is a more common target for an ABC versus 2x-3x for a 12345. So, let's assume the bear market drop from 2007 will be an ABC like Tony says rather than 5 waves ending an irregular flat like others say. Then, 1576-->667=909, so a typical ABC projection would be 0-213, not too far below what I think is a conservative projection of 300-450. Case in points...

a. Dow wave A in 1929 was 381-->217=164 pts while the total move was 381-->41=340 pts and 340/164=2.1x wave A

b. SPX wave A of W in 2000 was 1553-->1339=214 while the 3-wave W was 1553-->1081=472 and 472/214=2.2x

c. SPX wave A of Y in 2002 was 1316-->944=372 while the 3-wave Y was 1316-->769=547 and 547/372=1.5x

d. SPX wave A of W in July 1998 was 1191-->1054=137 while the 3-wave W was 1191-->940=251 and 251/137=1.8X

e. SPX wave A of Y in Sep 1998 was 1066-->965=101 while the 3-wave Y was 1066-->923=143 and 143/101=1.4x

f. SPX wave A in 1997 was 983-->932=51 while the ABC was 983-->855=128 and 128/51=2.5x

g. The main 1996 correction had a very long C wave and the historical late 1987 ABC was 4.3x wave A, but in Jan 1994 wave A was 483-->458=25 while the ABC was 483-->436=47 and 47/25=1.9x

So, ABCs are much less predictable given the possibility of overlaps, flats, triangles etc, but [ABC length]=[A length]*(1.5 to 2) seemingly covers most cases with lots of outliers. The minimum target for SPX in that scenario is 213.

 

Fourth, what about other common means of targeting the bear market bottom? How about a symmetrical zigzag? 1101-909=182. Even lower than 213 or my 300-450 "conservative" projection. What about C=A*.62? That projects 909*.62=564 and 1101-564=537 so there's hope SPX will only get cut in half from today. What about the wave 4 of previous degree, a common retrace area? SPX 63 in 1975 according to Tony. Ouch. What about the wave 4s since 1975? That's 1987 and 2002/2003 according to Tony. SPX was at 225 and 769 in those cases. We already broke 769 and if we're going even lower, is 225 next? What about other percentage declines in super cycle bear markets? Nasdaq 2000-2002 was 78%. Dow 1929-1932 was 89%. A 78-89% drop for SPX would be 173-347. Yikes!

 

All of the above technical reasons on top of the HUGE credit/debt/govt/population/spending/energy/tech/war/business cycles that are bottoming over the next few years tell me SPX sub-667 is highly highly likely, sub-500 is very probable, sub-400 is reasonable, sub-300 is possible and sub-200 is not out of the question. I'm using 300-450 for my target, because it would be a conservative smaller percentage than Nasdaq 2000 or Dow 1929 considering unprecedented monetary inflation

 

TARGETS

Here are my "conservative in my eyes" estimates for the rest of the bear market using the above analysis as a guide.

October 2009 SPX 1101 top

December 2009 SPX 850 w1 of C

Feb/Mar 2010 SPX 1000 w2 of C

Sep-Nov 2010 SPX 500 w3 of C

January 2011 SPX 700 w4 of C

October 11th 2011 SPX 450 w5 of C

Another A-B or 1-2 into spring/summer 2012 before we get the largest rally in years maybe in time for the 2012 elections or maybe we get Prechter's 4-5 down (ending an irregular flat versus Tony's ABC expectation from SPX 1576) into the 2012 elections

 

/more, S2: http://caldaroew.spaces.live.com/blog/cns&...1.entry#comment

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euphoria.jpg

 

Elliott Wave International is offering Robert Prechter's latest monthly market letter, The Elliott Wave Theorist, for free along with the firm's most popular U.S. analysis and forecasting publications. You can now download, print and read dozens of chart-filled pages of current analysis for U.S. stocks, the economy, precious metals, bonds, U.S. dollar and more -- and it's all free for one week only.

 

This opportunity ends Nov. 11.

 

Learn more about FreeWeek, and get your free reports: here

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GOOD POST - by Bird, about Ewaves from the Yelnick thread

 

We have at least two camps weighing in here, and I want to raise a third.

 

1. Camp #1 takes the continual re-calibration by the Elliott pundits as the market goes up as proof that the wave theory is bs.

 

2. Camp #2 says "screw you" the theory is just a probability tool and I can out-trade you anyway, so there.

 

3. I am in Camp #3. While I highly respect DG and think he probably out-trades me (I've averaged about 20% over the last 5 years--good but not phenomenal), I am a unrepentent seeker of the holy grail. The ONLY reason I trade is because something intuitive was touched by the promise of higher order when I first began looking at the markets in the mid-80s. I am convinced the markets continually express such a high order of geometry as to be beyond the reach of linear, non-scaled computer modeling.

 

We set our sights too low. The order may be above rationality, on a level of suprarationality. The wave theory was for me a beginning of that search, and if nothing else, it sets forth clues as to market structure that keep showing up as the markets unfold.

 

Consider this. Fibonacci ratios express abundantly in the markets, in time and price. And yet...why can't most of us effectively trade them? Because they can only be seen clearly after the fact? How could that be so? What is really going on? Just research every instance in which fibonacci ratios express both time and price from a single swing, focus only on the confluences of time and price, from that one swing, and see if it is all bs or not.

 

One way in which my findings seem to differ from both Camp #1 and #2, is that the patterns I see unfold give precise set ups for major tops and bottoms. (Note: unlike the above example of fibonacci time and price, this seems to require proper scaling similar to Gann's work.) But there is (thus far) a catch. While virtually all major turns will be geometrically locked in, redundantly so, sometimes so will lesser ones, thus making it difficult to know which is which. But high precision is very much a possibility...sometimes.

 

I think God is a geometer and the markets dance with it BEYOND BELIEF.

 

Posted by: Bird | Tuesday, November 10, 2009 at 05:12 AM

 

/see: http://yelnick.typepad.com/yelnick/2009/11...e.html#comments

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LONG TERM WAVE Count - from Yelnick

 

Joe, I think Prechter is off by a degree in his count and has been since he began the Lost Decade from 1995-2004. Specifically, the top in 2000 looks more like a wave 3 end not a wave 5. I count from a bottom in 1949 not 1932, and see 49W1 to 66, 49W2 to 82, 49W3 to 00, and we are in 49W4. This leaves a 49W5 to go, something like 2017-2035; and to much higher levels. Also, this means 49W4 is NOT likely to go as low as Dow400.

 

Depending when we began 49W3w3, we normally would fall to the 4th of the 3rd of 49W3. If 49W3w1 went to 87, it seems 49w2 ended in 91 (Neely/Zoran would end it in 94), and then we began w3. The 4th of that 3rd is easiest to count around 97, with w3 ending in 98, and then we had 49W3w4 and w5 in the final Y2K rally from 98 to 00.

 

The implication of this is we have already gone back to the 4th of the 3rd, and may retest but not break the March lows.

 

Another reasonable stopping point is the takeoff of the dot-com bubble, or 1995. This would target Dow4000. The Wave Theory guideline is that manias tend to retrace to their start, or put differently extended waves tend to retrace to the start.

 

Prechter counts this as starting in 1932, with 32W1 to 37, 32W2 to 42, 32W3 to 66, 32W4 to 74, and then 32W5 an extended fifth wave to 00. This count makes 1987 32W5w4, and he thought 1994 was the end of 32W5w5 and indeed the end of the whole move from 1784 to 1994. (Read At The Crest of the Tidal Wave and listen to da bear's comments about diagram 5-7.) He missed the dot-com bubble after that, and thought the fall off 2000 was a start of a huge 100 year bear market. He didn't adjust until 2005. That is why I call 1995-2004 his Lost Decade.

 

To be fair to Prechter, his wave interpretation follows a normal guideline: often an extended wave replicates as a fractal the larger wave structure. If we see 1995-2000 as an extended fifth wave within a fifth wave (Prechter's 32W5 which began in 74), it has a nice symmetry. He has two primary technical reasons for this count: the wave up from 33-37 divided as a 5, and what followed is not a zigzag, hence should be a wave 1 (a flat or triangle would have been a "3" not a "5:); and the 3rd wave from 42-66 had better fundamentals and broader participation than the wave from 74-00. In the Constant-Dollar Dow, however, Prechter has said that he would change his count to what I laid out or something close to it. The 1929 wave down when adjusted for inflation/deflation didn't end until 1949, and therefore the 2000 top ended a wave 3 not a wave 5.

 

/more: http://yelnick.typepad.com/yelnick/2009/11...o.html#comments

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(I sent this email to some traders friends today):

 

IMPORTANT FIRST HOUR of Trading on Wall Street today?

 

I dont know if you have any interest in Elliott Waves?

 

If so, the first hour or so of trading today, may tell us something important:

Is the rally over, and a big slide about to begin?, or :

Do we have one more wave up, to SPX-1107 or maybe SPX-1121?

 

This is being debated by me (as Nathan D.R.Bubb) with the founder of the Yelnick website, who is a respected Ellliott wave expert and trader.

 

If you are interested, here's a link to the discussion:

http://yelnick.typepad.com/yelnick/2009/11...o.html#comments

 

chart

xx1.gif

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THE COMING DEFLATIONIST REVENGE ?

 

Fade the Master?

The most notable (read: controversial) technical analyst today is Robert Prechter, and it may have come to the point that a significant part of the market fades his recommendations. Market is down at the moment, but we shall see if it bounces: Prechter just launched a barn burner of an EWT, which first discusses why a rolling top with divergences is a classic distribution pattern. We have been in this pattern since August, about when the small retail investor began to come back in again. Sheep to the slaughter? Sigh. Apparently $55B has rolled in from this group. This may end badly for them.

 

But the real price of admission of this issue is the discussion of deflation. We saw a blip up in the CPI, and I added a note to the prior post on this to the effect that the blip may have been due to temporary factors such as Cash4Clunkers. Prechter lays out a devastating case of why deflationary forces are accelerating even as various attempts are made to stem it, particularly in real estate. If you are feeling optimistic, this will shatter your mood. If you are pessimistic, you might jump out of the building - so pessimists should avoid it. The bullish among you, especially those expecting inflation, need to read and ponder his analysis.

 

/Yelnick: http://yelnick.typepad.com/yelnick/2009/11...r.html#comments

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SPX-1121, the target that was not hit

 

"Well,

everyone in the EW blog world has identified this nice triangle as wave iv, and was looking for a higher wave v to enter short or cover longs. Even EWI posted yesterday a nice chart with the final wave v approach, but it was just too perfect to be true. Instead of to reach long-waited target of 1121 in /ES, which was only ca. 10 points away, we dropped almost 25 points into the north, broke all trend-lines down and made the global picture again unreal complex.

 

SPX_1w1.png

 

Why I think it is complex - because:

 

We really don't know where we are now - is this end of the trend up, aka P2 is over, or is this just some-kind of wave iv, or a wave B

Tomorrow is OPEX and market has not confessed its direction to me, which means for me we have good chance to go up or down next 20-25 pts.

It is obvious that on OPEX day market is very volatile "

 

/More: http://epiccallonfate.blogspot.com/2009/11...bullz-trap.html

== ==

 

Many E-wavers, and other technical traders were awaiting that obvious target.

But the market did not give it too them. Now they are sitting there wanting to be short, but not wanting to pull the trigger.

 

Next week should be interesting

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The problem with Prechter is he is far too one dimensional with his views. He is often eventually correct but people can find themselves broke following his analysis.

 

My favourite elliottician is Quad G from Kitco who doesn't have any vested interest in being a bull or a bear.

 

This is his latest count on gold over on this thread https://www.kitcomm.com/showthread.php?t=41880

 

gold11-19-09ST.jpg

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THE COMING DEFLATIONIST REVENGE ?

 

Fade the Master?

The most notable (read: controversial) technical analyst today is Robert Prechter, and it may have come to the point that a significant part of the market fades his recommendations. Market is down at the moment, but we shall see if it bounces: Prechter just launched a barn burner of an EWT, which first discusses why a rolling top with divergences is a classic distribution pattern. We have been in this pattern since August, about when the small retail investor began to come back in again. Sheep to the slaughter? Sigh. Apparently $55B has rolled in from this group. This may end badly for them.

 

But the real price of admission of this issue is the discussion of deflation. We saw a blip up in the CPI, and I added a note to the prior post on this to the effect that the blip may have been due to temporary factors such as Cash4Clunkers. Prechter lays out a devastating case of why deflationary forces are accelerating even as various attempts are made to stem it, particularly in real estate. If you are feeling optimistic, this will shatter your mood. If you are pessimistic, you might jump out of the building - so pessimists should avoid it. The bullish among you, especially those expecting inflation, need to read and ponder his analysis.

 

/Yelnick: http://yelnick.typepad.com/yelnick/2009/11...r.html#comments

 

Yep. I thought it was interesting in the light of the 'knuckleheads' sentiment re deflationists recently Prechter comes out with his 'In Defence Of Deflation'.

 

You'll be happy to know, Bubb, (I hope), that I haven't jumped out of my building yet. In fact I'm cozying up for winter.

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  • 2 weeks later...
Bob Prechter interviewed on GS Radio

 

Over 1 hour in, after John Rubino

http://radio.goldseek.com/

 

Thanks for that Dr B. I have to admit to being pretty tired but was I listening to someone who is ever so subtley giving himself some room for the inflationary fears many have here. Sure not anytime soon, but there is a tonal change in old Robbie I thought. The way he went on about gold 'you certainly dont want to sell it...and old pre '64 silver for if this gets real bad'...and towards the end 'default'.

 

Ummm I dont think he even sounds like he believes the 2012 silver bottom 'in the charts' line from that. As to gold at 680 then perhaps we should be so lucky...

 

Will listen again in the morning.

 

Rubino was excellent too.

 

BTW what did you make of it? (prechter)

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  • 3 weeks later...
  • 3 weeks later...

Why You Should Care About DJIA Priced in Gold

 

http://financialsense.com/Experts/ewave/2010/0108.html

Now, instead of soaring the Real Dow is crashing relative to the nominal Dow. In fact, it’s barely off its low of May 2006. This dichotomy reveals the weakness that underlies the financial markets’ push higher. When mood turns and credit inflation reverses, the ensuing drop in the nominal value of the market should be dramatic.

 

"Dramatic drop" did indeed follow: Between October 2007 and March 2009, the DJIA lost 53%, high to low.

 

 

eliot.jpg

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