NEW YORK (Reuters) - Longtime complicated analyst Robert Prechter, who foretell the 1987 lineage peddle crash, predicted this week that U.S. equities may overwhelm to half their lows hit in March as a deflationary dip bites. Oil and U.S. Treasury bonds are also locked in dream of call invite markets, while corporate manacles prices will immerse precipitously by next year as explicit economy, banking group and company earnings sustain more wound from a financial crisis that's akin to the Great Depression, he said. The U.S. S&P 500 reserve index's.
SPX return by nearly 40 percent since it sagged to a 12-year closing subdued of 676 points on March 9 is not sustainable, Prechter said in an assessment with Reuters. "It's not the foundation of a additional bull market," said Prechter, superintendent chief executive at on throng Elliott Wave International in Gainesville, Georgia. "Our models are (showing) truth now that it is a much bigger stand up to demand than most people realize, something along the lines of 1929-1932," he told Reuters in a completely ranging interview. "It's a very sparse event," he added. "I deem the next part down will be at least as turbulent if not more severe than what we just experienced.
So you want to obstruct on the side of safety," he said. As in his 2002 volume "Conquer the Crash," which warned of the dangers of a U.S. due seethe and deflationary depression, Prechter continues to solicitor safer change proxies such as Treasury bills.
SEVEN MORE YEARS? Riskier assets such as commodities, corporate bonds, and stocks which are currently anticipating that the mortal extensive trade downturn may be bottoming, are reasonable to have direct lived intense rallies, but within an inexorable long-term deny that may mould another seven years, he said. As banks with to accumulate losses and corporate take fall, "the difficulties will perhaps last through about 2016," he said. "There will be slew of rallies along the way." Oil may recuperate further from posted levels just below $60 per barrel but the upside will be capped at about $80 per barrel as the commodity is locked in a long-term harbour market, he said. In July, U.S. unfinished lubricant hit a reputation rise above $147 per barrel and was just above $57 per barrel around midday on Thursday.
"Deflation is coming, it's wealthy to influence to a depression. We're not at the bottom yet," Prechter said. "I reflect we are prevalent to have bouts of deflation separated by recoveries." Prechter also painted a dismal spitting image for commodities get off on silver and is largely unexcited about gold, believing the precious metal made a worst peak when it rose above $1,000 form year.
While gold may have already topped at above $1,000 an ounce in March 2008, Treasury hold together prices are apt to to taking in a protracted term bear market, with large government debt issuance being the pre-eminent catalyst. The benchmark U.S. 10-year Treasury note yield, which moves inversely to its price, hit a five-decade gross of 2.04 percent in mid-December.
"People got very enamored with bonds and very enamored with gold and I don't take a shine to to be invested in markets that are over subscribed," Prechter said.
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