-->scgrieb mal jemand, CBS Marketwatch hält die ganze EWT für Esoterisch
Elliott Wavers' bearish view on gold
By Peter Brimelow, CBS.MarketWatch.com
Last Update: 11:50 AM ET Jan. 5, 2004
NEW YORK (CBS.MW) -- Go gold? The last remaining gold geezer is still negative - but...
"Geezer" is my playful name for veteran investment letter editors who were around at the time of the last gold blow-off in the early 1980s. I follow them on the theory that experience counts.
Bob Prechter, the celebrated proponent of the esoteric [img][/img] Elliott Wave theory of market movements, can't really be described as a geezer, of course. I mean, he's no older than I am!
But in his time, he's made some remarkable calls in the gold market (see my Aug. 25 column). So it's significant that he deviates from the geezer consensus that says, roughly speaking, that gold is in a primary bull market but that investors should expect setbacks.
Prechter has consistently said that he expects gold to go down in the short and medium terms -- albeit pending an inflationary Armageddon in the long term.
Gold reached a 15-year high at $417.90 an ounce during the last day of 2003, and it got 2004 on a decidedly bullish note. See Futures Movers.
But the Hulbert Gold Newsletter Sentiment Index has plunged to 11.54 percent average exposure as of Friday night. And as Mark Hulbert has said,"You will rarely see a more perfect textbook illustration of a bull market climbing a wall of worry."
So what is Prechter saying now? Interested readers (and a good few indignant ones; Prechter's record attracts controversy) want to know.
Major change at hand?
The latest issue of the Elliott Wave Financial Forecaster, edited by Prechter lieutenants Steve Hochberg and Peter Kendall, has just arrived.
"Every major market we cover is poised for a long-term trend change," Hochberg and Kendall say flatly.
The means, stocks: down; Treasury notes: down, albeit maybe after a bounce; U.S. dollar: forming a bottom, with multi-month rally about to start; and gold and silver:"at the end of their rallies."
But the Elliott Wave is not infinitely elastic. It does impose discipline -- of a sort. The big news is that Hochberg and Kendall have specified the point at which they will have to rethink their interpretations.
And for gold, that point is very close --"a close beyond $422." (The benchmark New York Mercantile Exchange contract traded well above that level Monday, and spot gold was trading right at that level lately.)
Of course, this point has been retreating as gold has fought its way upward. But my observation of the Elliott Wavers is that they do genuinely believe in their unusual system. They will eventually bite the bullet and accept it if the market has proved their interpretation wrong.
For the record, Hochberg and Kendall think they will be proved right if gold makes"a convincing close" below $380. They say that"initial support" will come at $350.
Some of those indignant readers I mentioned earlier want to know why we bother with the Elliott Wave at all. But it's worth noting that that Prechter was right to be bearish back in the spring of 2002, as the Dow slipped below the 10,000 mark.
A broader perspective
The simple answer: Hulbert Financial Digest monitoring shows the Elliott Wavers do have periodic spells of success.
It's hard to convince statisticians that these spells are significant -- but then, the dirty secret of Wall Street is that statisticians are equally skeptical of all research and money-management activity.
Moreover, investment letters also give insights that aren't captured by the ruthlessly quantitative Hulbert Financial Digest monitoring method.
For example, this current issue of the Elliott Wave Financial Forecast is derisively skeptical of the consensus of economic forecasters, which is currently extremely optimistic. Hochberg and Kendall comment that the year-end consensus has been optimistic since
2000 -- and look what happened etc., etc.
As it happens, the Dec. 30 issue of the eminently respectable London Economist magazine makes exactly the same point. Its informal poll of top economists attending the Kansas City Fed's Jackson Hole conference every summer has shown the consensus consistently wrong on everything -- including ruling out a recession in 2001.
We have been warned!
http://cbs.marketwatch.com/news/sto...DF1BC38A8A742%7D&siteid=mktw
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