Robert Prechter says stock market crash on track

 

• Robert Prechter's Elliott Waves International says the Global Supercycle bear market they have been predicting for years, remains on track
• Precter's Elliott Wave Theorist publication says global stock markets will plunge by up to 90 percent in the next bear market
• Stocks are historically overvalued, and stretched since the 2009 uptrend began, and current long term technical conditions and global debt burdens are far worse than in 1929
NEW YORK, New York - Elliott Wave International is sticking to its long-time claim that global stock markets are in the final stages of a multi-decade uptrend.
In its monthly bulletin Elliott Wave Theorist, the Robert Prechter-headed firm says current long term technical conditions and the global debt burden are far worse than those of 1929, when stock markets around the world collapsed, sparking the years-long Great Depression of the 1930s.
Prechter is expecting a Grand Supercyle bear market with stock indices predicted to drop by up to 90 percent.
"Within that background, our Interim Reports have been negotiating the near term waves. EWT expected the Dow to hold above the August 2015 low, and it did. Our upside target for the rally beginning February 11 was 17,500-17,800. The Dow actually made it to 18,167 on April 20 before starting a correction that has so far lasted a month," the Elliott Wave Theorist bulletin, published on Friday, said.
"The Dow exceeded its November 2015 high, so the correction from May 19, 2015 to February 11, 2016 can no longer be considered part of a developing triangle. It was a zigzag, which alternates with the flat correction of 2010-2011. That was our conclusion about the SP and the NYSE Composite, and now it also goes for the Dow."
"The overall outlook remains intact: In February the stock market started a final advance. The February-April rally is wave 1 of (5), and the current correction is wave 2, which will lead to waves 3, 4 and 5 to finish the advance from 2009, " says the Elliott Wave Theorist. "But the caveat is crucial: If the Dow falls below its February low of 15,500, we can forget about any more upside, and the Grand Supercycle bear market will be on."
Prechter's publication says stock markets are historically overvalued, and the uptrend since 2009 is stretched in price and extended in time. A waning but still extremely positive social mood has served to keep stock and bond prices elevated around the globe, it claims. "When the mood turns negative, all the unpaid pipers are going to show up at once," the theorist says.