25 November 2009
As the Dow did its mini Moon Shot up this morning on news of an increase in new home sales, Prechter took this snapshot of the market and sent out a recommendation to go 200% short. All in. This chart (below) came in his interim EWT today. He also has another chart for those who wish to know why he is timing it now, but I will leave that for subscribers to consider. This gap could be a continuation gap of a strong 3 of 3 wave up, but he bet the opposite, an exhaustion gap.
What influenced him was looking inside the housing report: much of this upside surprise was due to aggressive foreclosures. The growth was almost all in cheap condos, the low end of the market. Also, last month's sales were adjusted DOWN, not a good sign.
So far today he is winning this bet. You have to give him enormous credit for sticking with his analysis despite the slings and arrows of outraged unfortunates.