Wednesday, March 3, 2010
Blogger's comment engine was apparently snagged for a few days. Comments reappeared this morning and are all posted (hopefully). If any are missing, I haven't seen them, sorry.
As readers of this blog probably know, Bob Prechter is the guy who smuggled EW analysis away from the smart money and delivered it to The People in the 1970s.
In the late-30s/early-40s, R.N.Elliott discovered the EW insight, the fractal, and single-handedly unlocked a major part of how Nature works in his astonishing work titled, Nature's Law, The Secret of the Universe. Perhaps more astonishingly, one cannot find RNE's work on the shelves of any Library, or in any book store. If nothing else, the early discovery of the fractal and how nature uses them to generate complexity from simplicity makes this book invaluable to the scientific community. But magically, RNE's highly profitable masterwork had apparently vanished from the face of the Earth.
Bob learned of EW theory as a professional trader in the back rooms of large trading houses, and immediately realized the value of sharing with the world (he located the original on microfilm in the basement of the Met NY Library, if memory serves). To this day, the only way to read RNE's original book is in a back chapter of one of Bob's first offerings (I have no affiliation).
Bob is a brilliant guy with an amazing track record. His first big public call was in 1982, when he predicted that an enormous Wave 4 was now complete (from the mid-1960s to early 80s), and that a massive inflation was coming. He said you could do no wrong investing in paper stocks, almost anything would do. His 1982 chart (with the Dow bobbling beneath 1,000) projected a surge to Dow 4 to 5,000. Needless to say, professionals laughed at him until they wet themselves, after all, we were in a major recession at the Dow had scarcely topped 1K in all of stock market history. When the market surpassed Bob's call in a few short years, he began warning of a major top, the Wave 5 top formation.
"Pro's" drunk on inflation that they were way too stupid to predict, laughed again. Bob was a few years early, the market went crazy, we experienced a final bout of hyperinflation as the ending phase of the 1932-2000 Wave 5 of an even bigger 5 slowly fell into place. But Bob was exactly right. When viewed in the proper multi-century context, that he always framed but few were smart enough to wrap their minds around, Bob's calls will plot within a few pixels of precision.
As the 1990's big bang boomed, Prechter counted out the final form of the mega-top in 2000, accurate within a week or two. Again, an amazing call that few saw coming, and most people laughed so hard they lost everything.
This is when I learned EW theory as a direct result of Bob's work, and not a second too early. Luckily, I had done well as a lemming during the boom, but now I understand it was pure luck. Since then, I've often disagreed with Bob's calls on the margins, but for the most part, the few good EW'ers that are alive tend to agree in the macro.
Recently, Bob issued a warning in July 2007 when the Dow hit 14,000 that Wave B was complete and the mother of all C waves was forming. Again he pointed out that you could do no wrong, by going short this time. He issued a cover call at 6,500 (after I did :) and another short call at the recent peak. Bob is really good, assuming ones understands the inherent risks involved with attempting to call a multi-century top (maybe longer) to the penny.
Bob recently published some free video interviews/updates/warnings on his website. Essential viewing for anyone who doesn't fully understand what is coming:
Posted by fdralloveragain at 9:30 AM