Prechter: Time for a "Very, Very Long Bear Market Period"
It’s time for a second wave of deflation according to Robert Prechter, author of Conquer the Crash. He believes that yesterday’s selloff is a sign that we’re in for a week or two of more “pretty serious selling.”
“The global selloff in stocks accelerated Thursday, sending the Dow down 3.6% to 10,068 while the S&P 500 lost 3.9% to 1,071.59 and the Nasdaq shed 4.1% to 2,204. All major U.S. averages are now down for the year and at least 10% below their 2010 highs, meaning the downturn has officially entered ‘correction’ territory.
“Unfortunately (for bulls), there’s much more selling ahead, according to Robert Prechter, president of Elliott Wave International and author of Conquer the Crash. ‘We should be in for [another] week or two of pretty serious selling,” Prechter says. ‘They’ll be bounces along the way…but I think this should last a long time. We should be on schedule for a very, very long bear market period.’
“…Other than to say ‘a long way down,’ Prechter wouldn’t say how much further he thinks the market will fall, suggesting a repeat of the 1930-32 scenario when ‘extremely sharp rallies’ kept investors interested and ‘feeling like a bottom [was] forming.'”
In addition, Prechter is forecasting a “corrective mode that’s going to retrace virtually the entire” bull market of 1982 to 2000. Is it time to run for cover as he suggests? Looks like the Great Correction could be nigh. We’ll keep watching how his predictions unfold.
You can see all the details in a video on TechTicker’s web coverage of the Dow slumping 3.6 percent.