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There has been a lot of Elliott Wave bashing this year in spite of Prechter’s late February 2009 call for a rally from SPX 700 to the 1000-1100 area, and his call for maximum levered shorting about a week ago (he called for a 100% short position at about SPX 1020 in August), as well putting a sell on the long bond just before it collapsed under QE last spring, and recommending longs on USD late this summer and fall.
A lot of bears are fans or subscribers, and a lot of them lost money in 2009. Naturally, when they made money in the crash it was on their own brilliance, and what is a newsletter for if not to excuse your losses? But really, if you went 100% long SPX at 700, went 100% short in August and 200% short last week, you’d be up about 36% in under 12 months (after at least doubling your money from going “short with maximum leverage” in July 2007 and covering last February 24.
I do occasionally have nits to pick with EWI, but the bashing they get these days is just nonsensical. Who else, besides Prechter and Mish (and I harbor a suspicion that Mish learned about the credit cycle in part from reading Prechter) called for deflation while the bubble was raging?
At any rate, EWI is not the only game in town. Daneric has actually been more accurate in his medium/short-term calls than Hochberg over the last several months, and he posts every day for free. He suspected even as late as November that the top was not in, and that stocks would drift over 1100 on a sinking VIX before possibly topping out in January. Bravo! He counted the ending diagonal this month, said it looked finished a week ago, and on the evidence of this week’s decline is now finally calling Primary wave 2 over.
Graphite
January 24th, 2010 at 6:56 pm
A lot of bears are fans or subscribers, and a lot of them lost money in 2009. Naturally, when they made money in the crash it was on their own brilliance, and what is a newsletter for if not to excuse your losses?
IMO this has a great deal to do with the near-unanimous EWI bashing on the forums at Slope of Hope, evilspeculator, etc. For example, look at how EWI is often criticized for calling for P3 to start “any day now.” It’s really not the case at all, but I get the feeling a lot of bears loaded up on six month puts on that basis and need someone to project their mistakes onto.
Another thing EWI gets absolutely no credit for is warning their subscribers that 95% should simply stay safe and in cash and not fool around with shorting and other forms of speculation. And when they do recommend any speculations they caution against using monster leverage and playing with any money you cannot afford to lose. But from the tone of the EWI bashing you would thinking Prechter had been screaming “put it all in 3-month OTM puts!” since March.
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February 12th, 2010 at 3:08 pm
I will certainly not bash them. I learned waves from Prechter.
He is only telling what the wave count tells him and he is doing it according to the rules as he knows them.
He is being true to his craft and delivering a message that would help people prepare for down markets.
There is something that the markets taught me that Prechter did not.
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