Thursday, February 26, 2009

Breaking News! Prechter say “Sharp and Scary” Rally Coming?

Good News!

Elliott Wave International Inc.’s Robert Prechter was interviewed by Bloomberg yesterday. Key points to note:

He said “cover” shorts on Monday February 23, 2009.

He advised shorting U.S. stocks three months before the bear market began, said investors should end that bet after the Standard & Poor’s 500 Index tumbled to a 12-year low.

He warned of a “sharp and scary” rebound for anyone still wagering on a retreat, according to this month’s “Elliott Wave Theorist.”

Although Prechter has now reversed that call, he said the S&P 500 may keep plunging.

“Am I saying that the market has reached its final bottom? No!” he wrote. “The wave count is not quite finished, and ideally the S&P should continue down into the 600s.”

Prechter’s recommendation follows the advice of JPMorgan Chase & Co.’s U.S. equity strategist
Thomas Lee, who today issued a “trading buy” recommendation on the S&P 500. The index fell to 743.33 yesterday. Lee set a “short-term” forecast of 800.

“The market is compressed,” Prechter said in the note published yesterday.

“When it finds a bottom and rallies, it will be sharp and scary for anyone who is short. I would rather be early than late.”

So, shortists beware!!!

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