After getting a renewal notice for my Wall Street Journal subscription that was about four times as much as what I’d paid in recent years, it wasn’t too hard a decision to let it lapse (honestly, what did they expect?). By the looks of the comments for Jason Zweig’s article this weekend that features fear-mongerer Bob Prechter, you’d think that I’m not the only reader who is no longer a paying subscriber and that the ink is running a little yellow at the WSJ.

Get Ready for a Cataclysmic Market Crash! (Or Maybe Not)

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Could the Dow really drop 90%?

Earlier this month, in an interview that was widely circulated online, market analyst Robert Prechter predicted that the Dow Jones Industrial Average will fall below 1000 within the next six years. The Dow promptly surged back above 10000, but it is worth asking whether Mr. Prechter might be right anyway.
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Mr. Prechter is a technical analyst who studies the past price performance of the markets for clues to the future. He also believes that investors move in and out of the market on predictable waves of optimism and pessimism. “Because the mania [the bull markets of 1982 to 1999 and 2003 to 2007] was so terrific,” he told me this week, “it will be followed by a negative trend in social mood that will lead to a complete retracement.” That would put the Dow back to its levels in 1982, below 1000.

“In a deflationary environment, the last thing you want is to own any financial asset,” Mr. Prechter added.

Yeah, and gold will never go over $400 as Prechter famously wrote early in the last decade.

Damien Hoffman over at Wall Street Cheat Sheet had the far superior Prechter column this week when he asked, Is Elliott Wave Theory High Priest Robert Prechter Certifiably Insane?