Prechter's Latest: "A Deadly Bearish Big Picture"

Just after 2:30 PM Eastern today, the U.S. stock indexes crashed nearly 10% in several minutes of panic. And all because of...


...Greece?

Greece, dear reader.

If you believe that one, then please -- stop reading. I can't say anything you'll find helpful.

But if you remain tuned to this station, I will observe that the nonsense began instantly. At exactly 2:45 PM The New York Times put up a headline which claimed "Stocks Plunge on Concerns Over Greece." The story itself reported absolutely nothing NEW about Greece, for the simple reason that there IS nothing new. Everyone who cares already knew the relevant facts about that country's financial crisis. It's been in the news for weeks and months.

So the story did NOT become "worse" today, or more "threatening" today. This was not the day Greece became "the first of several dominoes in Europe that could fall."

Then there's the U.S. dollar rally this week -- is "Greece" the reason? Or, is this week part of a rally that's been underway all year, contrary to the conventional wisdom but in agreement with EWI's forecast?

Crude oil futures fell 3.6% today. The CRB Commodity Index is down nearly 6% on the week. "Greece" again? Or, part of "The Great Credit Contraction" spelled out in the May issue of The Elliott Wave Financial Forecast?

Neither the word "Greece" nor the phrase "Greek financial crisis" appear in Bob Prechter's latest Elliott Wave Theorist. But, you may recall that issue's headline, which I quoted in a recent email message I sent you: "A Deadly Bearish Big Picture."

Here's what else my email said:

If you've read any of Prechter's books or heard him in an interview, you know that overstatement is not his style. When he says the "Big Picture" is "Deadly Bearish," that is exactly what he means.

The past week has brought that "Big Picture" a lot closer. The issue at hand is what YOU need to do as an investor. Market tops are a process -- in recent months, you've probably found the top of this bear market rally frustrating indeed.

Yet the brief version of the story is simple: The frustration is over. It's time to get in front of where the trend will go from here.
 
Robert Folsom

Elliott Wave International