Robert Prechter, my much admired stocks guru, and who accurately advised us all to get out of the shorts way in March (read my Mar 8 blog), has now turned bearish. This is based on the assumption that the 'B' wave of the "ABC" counter-trend has completed and that the 'C' wave (down) has begun.
He is quite sure that the next wave down will be bigger, and that the March lows will break. He also thinks we are on the road to the next depression, and that commodities have run their course. Gold should decline soon, and the USD has hit a bottom, and should be reversing soon.
According to Prechter, stories are told at market bottoms and at market tops. In March, people sell because there were so many doomsday stories, when in fact , it marked a significant bottom. Now, it seems people are believing in the opposite, in a V-shaped recovery. Truth be told, this should signify a market top, according to Prechter.
On the depression story, Prechter believes that it is much needed, so as to stop once and for all,
the rising asset prices currently fueled by monetary policy.
I am a definite buyer of Prechter's theories. I need to prepare for the coming "Great Sale", since according to Prechter, this down move is likely to be much larger than the previous one.
On hindsight, perhaps I bought UOB too early. I will be trying to keep a very close watch on it, and try getting out of it with a profit. Better keep my powder dry for now.
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