Elliott Wave: Prechter Stays Bearish

Robert Prechter of Elliott Wave, who is called ‘King of the Bears’ enough that he is called a permabear, came on CNBC this afternoon after the closing bell to tout the new bear market or that what we have seen is a still nothing more than a bear market rally.  Prechter said at least since the month of November he is seeing more cautious signals and now investors are far too optimistic.

Maria Bartiromo asked him if this is still a bear market, to which Prechter said, “Oh definitely.”  He then noted how we have matched the January highs and people are too optimistic.  He said this is “Not a new bull market…” and went on to show how the sentiment is so optimistic now with recent weeks’ surveys showing that only 23% are bearish and how investors are buying twice as man call options than put options.

As far  as Prechter is concerned, safety in the safest instruments is the anser and at least the dollar is in your favor.. “and put it in the safest institutions.”  Lastly, he noted that over the next year or two stock prices will be lower and hopefully you’ll see good bargains and an opportunity to buy.  He thinks that both stocks and oil are putting in double tops.

Permabulls and Permabears are always right.  You just have widen out your time frame.  That full Prechter video is here.  It will be for you to decide, and keep in mind that these sort of guys almost never get giddy or really excited, but he just didn’t seem as certain the last time he was on CNBC when he said the equivalent of “This could be your last chance sell with the DJIA above 10,000.”

The DJIA was around 10,100 when Prechter said it was your last chance to sell and the DJIA did briefly go under 10,000 in early February.  But even with the first negative day Friday in almost two weeks the DJIA closed at 10,741.98 on Friday.

JON C. OGG