2010 Stock Market Forecast

 

 

"A Deadly Bearish Big Picture"

April 29, 2010

That's the headline Robert Prechter gave to his just-published Elliott Wave Theorist. You can read that entire 10-page issue right now -- for FREE!

Continue reading to learn more or get it now.

Headlines are usually about what happened already, but Prechter's headline is about what happens next. It goes beyond providing information. Yes, he wants you to see what he sees -- but Prechter's purpose is to provide you with a forecast so that you'll be prepared.

So please consider the top headline once again.

If you've read any of Prechter's books or heard him in an interview, you know that overstatement is not his style. When he says the "Big Picture" is "Deadly Bearish," that is exactly what he means.

This issue of the Theorist shows the depth of Prechter's recent research into what that "Big Picture" includes. The array of time cycles he explains is nothing short of amazing; each one is relevant to the how and when of what stock market prices will do from now until the year 2016.

And make no mistake, this April issue of The Elliott Wave Theorist fully recognizes the extraordinarily optimistic sentiment that now blankets the financial world. Truth is, the evidence is everywhere -- you just have to know where to look. Did you know that Time magazine quotes two professors who are telling 20- and 30-year-olds to use ALL their retirement savings to buy stocks on margin?

This is exactly the type of one-sided evidence that covered the financial world back in February of 2009 -- except, of course, the extreme then led to a "deadly bullish" conclusion. Yes, that was precisely the month when Bob Prechter's Elliott Wave Theorist told subscribers to expect the stock market to turn bullish.

Once again, find out why investors turn to EWI for a different perspective. It's better to be with it than without.

Get your FREE copy of Prechter's latest research -- Download the April Theorist now.

 

2010's Most Important Investment Report

Please recall with me the prevailing investor sentiment from early March 2009.

U.S. stocks had been in strong decline for more than a year. Some of the most celebrated bulls had turned into bears, and the few bears that did exist before the downturn had become even more bearish. The Daily Sentiment Index for the S&P registered an astonishing 3 percent bulls -- virtually no one was betting on the upside -- and the bleakest of forecasts for 2009 called for nothing short of financial apocalypse.

But well-known contrarian analyst Robert Prechter took the opposite side of the trade. Prechter, a long-time bear, emerged as a solitary bullish voice among overwhelming bearishness. After closing out a record short recommendation that gained 800 downside points in the S&P, he issued the following bullish warning to bears:

"The market is compressed, and when it finds a bottom and rallies, it will be sharp and scary for anyone who is short."

In the following days, the mainstream media reported that "perma-bear" Robert Prechter had turned bullish -- the reports were only half true. Prechter had, in fact, turned intermediate-term bullish. Why?

Prechter saw something on the horizon that the shortsighted mainstream market watchers did not, which brings me to the untold portion of this story …

In Prechter's eyes, the bear market is far from over, and what he expects to happen after the current rally ends is significantly important to how you position your portfolio now.

Prechter's firm, Elliott Wave International, is now offering for a limited time The Most Important Investment Report You'll Read in 2010. Inside, Prechter reveals his big-picture outlook for U.S. stocks and the U.S. economy. The eye-opening 13-page report, originally published for paying subscribers to his Elliott Wave Theorist, examines the government's unprecedented involvement in the financial markets and private enterprise. It reveals what's already taken place in candid detail then focuses you on what the government's measures will actually do for the U.S. financial markets and economy.

Be assured, this report delivers analysis you will not find on the front page of The New York Times or Wall Street Journal. It delivers independent insights from the man who saw the bear market -- and today's bear market rally -- coming when virtually no one else did.

But hurry! This free 13-page report is available for a limited-time only due to its timely content.

Please learn about the coming crash and download the free 13-page Most Important Report for 2010 now.

 

The Debt Problem

We've got the most important investment report you will read in 2010. Forget the theoretical and hypothetical sorts of analysis that occupy so much space online. Bob Prechter gives 22 real-life examples of how deflation is beginning to spread in the U.S. economy -- along with 13 charts that make the examples even clearer.

You want to know whether to prepare for inflation or deflation? This report will answer your questions. Read this excerpt to see what we mean. Oh, and try to forget that a No. 2 seed (Villanova) almost got upset in the first round and that Georgetown, a No. 3 seed, got beat by Ohio University, a 14 seed.

  • States Are Broke and Approaching Insolvency
    While state “regulators” clamp down on profligate banks, the same states’ legislatures continue to blow money. For years, state governments have been spending every dime they could squeeze out of taxpayers plus all they could borrow. (The lone exception is Nebraska, which prohibits state indebtedness over $100k. Whatever Nebraska’s official position on any other issue, by this action alone it is the most enlightened state government in the union.)
  • But now even states’ borrowing ability has run into a brick wall, because the basis of their ability to pay interest—namely, tax receipts—is evaporating. The goose—the poor, overdriven taxpayer—is dying, and the production of golden eggs, which allowed state governments to binge for the past 40 years, is falling. The only reason that states did not either default on their loans or drastically cut their spending over the past year is that the federal government sucked a trillion dollars out of the loan market and handed it to countless undeserving entities, including state governments.
  • “It’s hard to imagine what happens when stimulus money runs out,” says a budget expert. (USA, 10/29/09) But it is not at all hard to imagine what will happen. Conquer the Crash imagined state insolvency seven years ago. The breezy transfer of money from innocent savers to state spenders is going to end, and when it does, states will cut spending and “services” drastically. They will also default on their debts, which will be deflationary.

Dominos are starting to fall, for example: http://finance.yahoo.com/news/More-Cities-on-Brink-of-cnbc-846713446.html?x=0&sec=topStories&pos=2

Elliott Wave International's latest free report puts 2010 into perspective like no other. The Most Important Investment Report You'll Read in 2010 is a must-read for all independent-minded investors. The 13-page report is available for free download now. Learn more here.

What does the Old Fox Think for 2010?

March 4, 2010: Prechter’s Bloomberg Interview:

 

Is 2010 Going to be a Bear Market?

The current bullish sentiment is not extreme, yet the stocks are over bought on the short term. A pullback that should retrace at least 30% of the advance should bring us back to S&P 1000 level. A 60% retracement could bring us back to around 900 in S&P. Much depends on US dollar. EUR/USD is still falling within it’s channel down. As the US dollar rallies, it will be bearish for the US stocks, housing and commodities because it will mean that debt is deflating. Once the USD rally is complete, a short term decline should provide support the stocks.

Subscribe to Short Term Update at Elliottwave International for frequent analysis of the markets, or the monthly Financial Forecast and Elliott Wave Theorist for the big picture. Learn what drives the market lower.

April 2010: Are we close to the top? Accumulation-Distribution Index rings the bell again.

SPY Chart

We are approaching 61.8% retracement level on S&P 500. Check out the stock market crash that happened after DOW retraced 50% of the decline in 1930.

Prechter’s Stock Market Bottom Call - February 2009

 

Prechter’s Stock Market Top Call - October 2007

 

Become a member at Elliottwave International to get access to upto date financial forecasts:

Elliottwave International

Why 2010 Should Be One to Remember

Elliott Wave International's latest free report puts 2010 into perspective like no other. The Most Important Investment Report You'll Read in 2010 is a must-read for all independent-minded investors. The 13-page report is available for free download now. Learn more here.

In the realm of market psychology, there's a big difference between optimism and extreme optimism. The first is seeing the glass half full. The second is seeing the glass half full deep in the heart of a bone-dry desert. In finance, it's what we call "Buying the Dip" mentality -- when all outcomes, even losses, are cause for celebration.

We are there now.

To wit: With a new year upon us, the mainstream has already come up with a fresh tagline to define the next 360-or so days. It even rhymes: The Bull Runs Again In 2010. This projection is in no way "in spite of" the fact that the U.S. stock market just finished its first decade of negative returns since the Great Depression; it's because of that fact.
See, according to the mainstream experts, this "Lost Decade" of abysmal stock performance is the very foundation on which a new bull market will apparently be born. One economic scholar recently coined the phenomenon the "Slingshot Effect" -- the more severe the downturn, the faster the recovery. (Associated Press)

Adding to the upbeat chorus are these recent news items:

"The horrible decade has wiped out all the excesses of the previous two decades and put us back on track for more normal returns." (USA Today) -- AND -- "It may be the best of all possible worlds." (Business News)

Back in the late 1990s, when the "unstoppable" NASDAQ began to experience regular days of double-digit drops, it was "Buy-the-Dip." Now, it's "buy the entire lost decade." And, as the Dec.31, 2009 Elliott Wave Financial Forecast Short Term Update reveals -- current sentiment readings "continue to show that stock market bears have packed up and moved to Florida for the winter."

Take one look at the evidence, and you'll see that a defining pattern emerges: Low levels of bearishness have consistently coincided with one kind of market move. Combine this picture with the other measures of investor sentiment like momentum, volume and Elliott wave structure, and the evidence tilts overwhelmingly in favor of an unforgettable year.

Elliott Wave International's latest free report puts 2010 into perspective like no other. The Most Important Investment Report You'll Read in 2010 is a must-read for all independent-minded investors. The 13-page report is available for free download now. Learn more here.

Nico Isaac writes for Elliott Wave International, a market forecasting and technical analysis firm.

 

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Trading the Stock Market - Stock Market Timing

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January 25, 2012
Why do Traders Fail?

December 20, 2011
How to Prepare for the Coming Crash

November 15, 2011
What are the Best Technical Indicators for Stock Market Trading?

October 20, 2011
Money, Credit and the Federal Reserve Bank

September 19, 2011
How Does Money Disappear in the Stock Market?

September 2, 2011
Behind Closed Doors at the Federal Reserve

August 18, 2011
Stock Market in Free Fall Territory

July 4, 2011
Can the Fed and the Economists Forecast the Future?

June 27, 2011
Trading and Investing Using Elliott Wave Theory

June 10, 2011
Is Lower Trade Deficit a Bullish Sign for the Stock Market?

May 3, 2011
Bin Laden and the Stock Market

April 19, 2011
Is deflation a threat despite Bernanke's printing press?

March 10, 2011
Pop culture, markets and the social mood

February 7, 2011
Should you or should you not diversify your investments?

January 6, 2011
Do Earnings Drive Stocks?

January 4, 2011
Is Your Bank Safe?

December 22, 2010
Why Diversification Does Not Work in Today's Markets

November 24, 2010
Individual Investors Have Jumped Into Another Fire - Muni Bonds Crashing

October 27, 2010
Why You Should Care About DOW (DJIA) Priced in Gold

September 23, 2010
Signs of Deflation

August 19, 2010
Efficient Market Hypothesis - Is the Market Really Efficient?

August 10, 2010
Economic Crisis That No One Saw Coming

July 12, 2010
Stock Market Bottom and DOW Dividend Yield History

July 2, 2010
Deflationary Crash Ahead - Long Bear Market Looming

June 9, 2010
How to Spot a Stock Market Top

April 19, 2010
Goldman Sachs Charged With Fraud

April 6, 2010
Understanding the FED

March 16, 2010
What To Do With Your Pension Plan?

March 15, 2010
Popular Culture and the Stock Market

March 11, 2010
Five Fatal Flaws of Trading

March 9, 2010
Does Gold Always Go Up In Recessions and Depressions?

February 25, 2010
Credit Default Swaps Indicate Trouble for European Debt

February 23, 2010
News is Not What Moves the Markets

February 22, 2010
What Chinese Malls Tell Us About the Economic Reality

February 20, 2010
How Elliott Wave Principle Can Improve Your Trading

February 19, 2010
Europe’s Return to Risky Investment

February 17, 2010
Stock Market Myths

February 11, 2010
Robert Prechter on Herding and Markets\’ “Irony and Paradox”

February 10, 2010
Will The Bears Relinquish Control?

February 5, 2010
EUR/USD: What moves forex markets?

January 27, 2010
Can Bernanke Survive the Bear Market?

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November 20, 2009
The FDIC Anesthesia Is Wearing Off

November 6, 2009
Financial Mania: What record trading volume says about confidence

October 29, 2009
Black Monday: Ancient History or Imminent Future

October 20, 2009
Gold: Bull or Bubble?

October 9, 2009
Death of the US Dollar

October 5, 2009
Why Technical Analysis Beats Out Fundamental Analysis

September 17, 2009
Germany’s DAX: Free Insight into Europe’s Leading Economy

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Five Tips for Successful Trades

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How A Bear Can Be Bullish And Still Be Right

September 4, 2009
Prechter Stands Alone Again - He’s Done the Math

September 2, 2009
How IRAs Can Tie Investors’ Hands

August 20, 2009
The Bounce is Aging, But The Depression is Young

August 13, 2009
Emotional Pitfalls of Trading

July 23, 2009
The Three Phases of a Trader’s Education

July 15, 2009
Spot a Pattern That you Recognize

June 15, 2009
A Road Map To SENSEX 100,000

May 29, 2009
Gold Is Still Money

April 23, 2009
Think That Central Banks Move the Markets? Think Again

April 2, 2009
Bob Prechter on Silver & Gold

March 25, 2009
Key To Trading Success: Ignore Nature's Laws?

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Are We Near a Low in the Stock Decline?

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6 Questions You Should Be Asking About the Financial Crisis (And 6 Must-Read Answers)

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February 26, 2009
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The Last Bastion Against Deflation: The Federal Government

February 10, 2009
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