Elliott Wave analyst Robert Prechter says the rally is over and predicts the start of "another wave of the bear market," similar to the one investors experienced in 2008.
“I don’t think we’ve hit the V bottom yet,” Prechter told CNBC.
Prechter, who predicted last March that the Dow would top 10,000, says investors don’t need to be hurt in market downtrends.
“Just make sure you have stepped aside in the safest possible cash equivalents in the safest possible institutions,” he advises.
“My message is very easy,” Prechter says.
“You want to be as safe as possible. You might miss an upside, but you won’t get hurt.”
To achieve safety, Prechter advises investors to move their money into Treasury bills and make sure their banks are financially healthy.
“You don’t want to be in stocks, real estate, or commodities,” says Prechter, who believes the number of bank failures is going to increase next year.
Stocks are still overvalued, but they won’t be for long, according to Prechter.
“It’s still too early, but there’s a great buying opportunity coming,” he notes.
Prechter is very bullish on the dollar, which he thinks is “going to be up for a year or two” and bearish on gold.
The U.S. dollar extended losses against the euro in choppy trading on Wednesday after the Federal Reserve left interest rates steady, as expected, and said it intends to keep interest rates low for an extended period, Reuters reports.
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