Tags: robert | Prechter | Dow | Plunge | 1 | 000 | Ongoing

Prechter: Dow to Plunge to 1,000 in Ongoing Depression

By Dan Weil   |   Wednesday, 29 Sep 2010 08:34 AM

It’s not difficult to find experts who think the stock market will retreat from its record-breaking September rally. But it is difficult to find someone who thinks they’ll drop as far as market guru Robert Prechter does.

The Elliott Wave president is looking for the Dow Jones Industrial Average to plunge 92 percent to 1,000 within six years.

The weak economy will push stocks lower, Prechter told CNBC. “Economists have something very wrong,” he said.

“They are talking about a Great Recession and that it’s over. I think they’re wrong on both counts. What we have is a partial recovery in an ongoing Depression.”

A more optimistic view could get investors in big trouble, Prechter says.

He thinks a bear market will remain in place until debt problems clear up and the market’s overvaluation clears up.

On the technical side, Prechter notes that cash positions in mutual funds are at 3.4 percent, near a record low, indicating that investors are overweight on stocks.

“My message is safety above all right now,” he said.

And what investments does Prechter consider safe at this point? Treasuries, cash and the dollar.

Many experts disagree with him about stocks.

“After a huge rally in the month of September, it would not be a major surprise for some type of consolidation,” Todd Salamone, senior vice president at Schaffer’s Investment Research, told The New York Times.

“But we think there is a lot of short-covering potential left.”

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It s not difficult to find experts who think the stock market will retreat from its record-breaking September rally. But it is difficult to find someone who thinks they ll drop as far as market guru Robert Prechter does. The Elliott Wave president is looking for the Dow...
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