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Did They Finally Smoke Bob Prechter Out of His Hole?

|Includes: SPDR S&P 500 Trust ETF (SPY)

I have a confession to make. I don’t understand Fibonacci or Elliot Waves. It’s not because I am not very smart (which of course is true), it’s just that in spite of the relentless publicity, I’ve never actually seen any evidence that they work.

For example, when did Bob Prechter ever make a prediction that was correct? Like you know…”The S&P 500 will bottom at 675”.

He says he “predicted” the turn in the S&P that happened in March 2009, well all I saw was that in January he said something like “hold on to your shorts”.

When I grew up in Kenya they had witchdoctors who (for a fee) would make up a little pattern out of chicken bones and a few feathers and put them outside someone’s house, which would totally freak the “occupants” out. I remember me and my mate Martin figured out the basic idea, and for a while we caused mayhem in the neighbourhood…until we were caught. But since then I have always been suspicious about “magic”.

Go on Bob, you have been at this for ages “Give us a Sign”, just ONE prediction that actually happens some time in the future. OK I’ll concede you are a lot better than Roubini in the “predictions” business, but not a lot.

Anyway, over the past few days Bob was on TV salivating about the 13% drop in the S&P 500 and declaring (again) that the end is nigh.

Robert Prechter discussed the recent global sell-off that has sent all major U.S. averages 10% below their 2010 highs with Yahoo! Finance Tech Ticker host Aaron Task on May 20, 2010. Prechter says that the current climate shows that "we're in a wave of recognition" where the fundamentals are catching up to the technicals and that it's time to prepare for a "long way down."

Frankly a 13% blip in the S&P 500 is just that. It doesn’t qualify for anything more than a road-hump in my book, so the shorts got lucky and the longs got screwed…there is always next week.

I’m not even sure if that qualifies as the “correction” my analysis said would happen when the S&P 500 went above 1,200 (, for me a correction is 15% to 20% down, minimum.

But at least it’s there in writing, hold onto your hats guys; the market is going a LONG WAY DOWN.

But I got a tip, don’t hold your breath.

Disclosure: "Neutral S&P 500"