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Armageddon Coming - Dow 600

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Just heard about this last prediction.

He is really sticking his neck out on this one, would any of the EW aficionados comment?

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Hussman also warns that the US sharemarket could be on the brink of a slide as investors realise that the US economic recovery – and corporate earnings – are going to fail to meet optimistic expectations. “The overwhelming risk at present is that we are in what I've called the "recognition phase" where economic reality and earnings guidance deviates substantially form the expectations that have been priced into stocks. Two phases of a market downturn are generally the most hostile. The recognition phase and the capitulation (or "revulsion") phase

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I've wanted to say this for a long time, even though it is annoying............. "LINKY".......... :rolleyes:

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BBC Fivelive Money prog tis morning talking about corporare earnings improving - not sure how - but hence why people are buying shares.

That Chinese bank floating this morning may point to the high before the collapse...

I am getting fed up wainting for the end of the world in the markets!

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Apparently this will be over the next 5 to 7 years which, I am no expert, means sod all to me. Does he mean it might happen today or that it will not happen for 5 years? Is he talking a big sudden crash or a protracted slide?

http://www.guardian.co.uk/business/andrew-clark-on-america/2010/jul/06/useconomy-

Prechter tells the NYT that he now expects a crash akin to the collapse of the South Sea Bubble of 1720: "If I'm right, it will be such a shock that people will be telling their grandkids many years from now 'don't touch stocks'."

His misery doesn't end at the stockmarket. Prechter reckons US house prices, which have fallen by 40% in some states, are only about halfway through their fall. He thinks that pretty soon, a US dollar will be worth no more than a Swiss franc and that Europe is in for a spell of deflation.

Before anybody jumps off a cliff, it's worth noting that Prechter has been in this mood before. Back in 2002, he published a book called "conquer the crash: you can survive and prosper in a deflationary depression" which warned of imminent catastrophe and was, at best, extremely premature. Even back then, he was dubbed the "king of doom".

Edited by The Masked Tulip

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Apparently this will be over the next 5 to 7 years which, I am no expert, means sod all to me. Does he mean it might happen today or that it will not happen for 5 years? Is he talking a big sudden crash or a protracted slide?

http://www.guardian.co.uk/business/andrew-clark-on-america/2010/jul/06/useconomy-

whats he measuring the Dow in

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He's talking about the US stock market which had a bubble the UK one did not.

But he's still a whacked out crazy. It's always lazy thinking to just talk about "markets".

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He's talking about the US stock market which had a bubble the UK one did not.

But he's still a whacked out crazy. It's always lazy thinking to just talk about "markets".

Maybe - but if the DOW tanked the FTSE would also. The FTSE is the DOW's bitch!

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Maybe - but if the DOW tanked the FTSE would also. The FTSE is the DOW's bitch!

Yes, can't see it though.

Why would utilities, for example, sudenly trade at 10% of current value given their guaranteed income streams? They'd be paying something like 60% yield.

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Yes, can't see it though.

Why would utilities, for example, sudenly trade at 10% of current value given their guaranteed income streams? They'd be paying something like 60% yield.

No income stream is guaranteed. In a deflationary environment everything can go down.

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Nice comment:

It's amazing that Prechter has any credibility left. People say stuff like he "called the top here." It's EASY to call the top when you're ALWAYS calling the top. At some point you'll be right. In November 2009, Prechter went 200% short and again in January 2010 he went 200% short. There's no way he didn't suffer massive losses in both instances. I'm amazed he has any capital left to risk at this point.

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Yes, can't see it though.

Why would utilities, for example, sudenly trade at 10% of current value given their guaranteed income streams? They'd be paying something like 60% yield.

Nothing has a guaranteed income stream, commodity prices are no more guaranteed than any other price of anything else, there is nothing to stop oil trading below 10 dollars a barrel if thats where it wants to go.

The idea that the US market had a bubble and the UK not is interesting when there has been a 95% correlation between them since the inception of the FTSE.

As for prechter his view is that this is a credit bubble and a long wave credit cycle, thats been developing for a couple of hundred years and that at the very least the credit/finance/leverage bubble is going to be removed. Whether hes right or not is just another opinion that only time will tell. Personally i think hes on the right track and the western markets are going to collapse in fiat terms with the worst portion happening around end 2011 through 12 and that ultimately the FTSE is on its way to sub 1000 back to its pre credit / finance bubble levels of the 70s (which is why houseprices dont bother me that much, they are just a subset of a potential economic crash). Id be more than happy to change my views on that though because of the social carnage that that would create but the market has over the last 4 years been text book perfectly setting this up as far as my analysis goes.

I still think prechter is too early myself though because hes been calling the top to this bounce for 6 months, i dont think we are quite there yet in the US and Asian markets (although i think the FTSE has tooped) going long at this point with anything outside of bought options is extremely dangerous because the next move down (lasting about 3 years) if correct will be many magnitudes more vicious than the declines of 2008 as it is the stage when fundamentals ultimately collapse and widespread realization happens . The so called flash crash of April is a strong pointer to the sort of moves to expect, extreme emotion and extreme volatility

There is always the possibility of first contact i suppose and the opening up of interplanetary trade routes, coz i cant see much else from a fundamental viewpoint that could result in western economies avoiding mass personal / business and govt debt defaults

Edited by Tamara De Lempicka

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Yeah, it's not like we have an imminent death cross, massive amounts of (now proven to be impotent) stimulus, credit shrinkage, high and growing unemployment, an unwinnable war, an environmental disaster, rising CPI, and a devalued currency, a cobbled together gumermint.

Get with it people! BUY BUY!

(I have been a contrarian and gone 300% short)

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Yeah, it's not like we have an imminent death cross, massive amounts of (now proven to be impotent) stimulus, credit shrinkage, high and growing unemployment, an unwinnable war, an environmental disaster, rising CPI, and a devalued currency, a cobbled together gumermint.

Get with it people! BUY BUY!

(I have been a contrarian and gone 300% short)

Cherly Cole has malaria and, judging by the papers this morning, celebrity illness is breaking out all over. Look at Posh Spice... she looks like the stress of worrying about Cheryl has resulted in her almost collapsing herself.

:rolleyes:

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Yes, can't see it though.

Why would utilities, for example, sudenly trade at 10% of current value given their guaranteed income streams? They'd be paying something like 60% yield.

Is there anything really guaranteed? If deflation hits their guaranteed incomes will be less.

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I have read the elliottwave theorist May issue. it is extremely bearish. The whole elltiottwave theory is based upon social mood swings. They reckon the stock market direction is not based upon news or corporate earnings but has everything to do social mood swings. Their short term forecast have been pretty accurate. I base my FX decisions on elliotwave counts and have sofar been pretty successful.

What this May issue discusses is chart setups as they are now are showing a very good resemblance of the charts that happened in the great depression. Using that info they than predict what would happen for the next 6 years. It is extremely bearish. They do predict a Dow of 600 by 2016.

I do think you can 't go wrong by buying an ETF to short the S&P 500 or russel index. However be aware that an ETF is a derivative and subject to counter party risk. This ETF will not exist when the dow hits 600. But initially it will be a good instrument to use.

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Is there anything really guaranteed? If deflation hits their guaranteed incomes will be less.

Yes, if you think big deflation is coming.

Though if I want to buy sufficient utility shares to pay my utility bills out of the dividend income annually then I'm not worried if the dividend yield drops to 10% of what it was as my bills will also have dropped to 10%.

If you are assuming big devlaution will drive Dow to 600, or contrarily big inflation will drive gold to $5,000, then what you are expressing is a belief in substantial deflation or inflation coming. So what is moving is the measure of the asset rather than the intrinsic value of the asset. You can substitute many assets. How about interchanging them? Dow 50,000 (assumes big inflation), gold $100 (assumes big deflation). I don't believe any of it; the guy has just gone for an attention-grabbing headline.

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I don't believe any of it; the guy has just gone for an attention-grabbing headline.

You will not find that this guy is about one off attention grabbing headlines. Prechter has been in the deflation camp since 2000. History has shown deflation is the only outcome of a massive credit bubble. The credit crunch part 1 has shown what can happen. Now stimulus has run out and governments are up to their eyeballs in debt what next. We see European banks only being held up by a lifeline from the ECB we see austerity measures in Europe and also taking hold in the US states.

Credit crunch part 2 is upon us soon.

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Apparently this will be over the next 5 to 7 years which, I am no expert, means sod all to me. Does he mean it might happen today or that it will not happen for 5 years? Is he talking a big sudden crash or a protracted slide?

http://www.guardian.co.uk/business/andrew-clark-on-america/2010/jul/06/useconomy-

That link is not working for me, but this one is

http://www.guardian.co.uk/business/andrew-clark-on-america/2010/jul/06/useconomy-shares

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The reason Prechter expects this is because EW theory predicts a 5 wave move will retrace to the prior wave 4, so in his book he says the wave 4s he looks at is the 70s (dow 1000) and the 30s/depression (dow 400).

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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