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Robert R. Prechter, Jr. (born 1949)is an American technical analyst or "market timer" and author, known widely for his financial forecasts using the Elliott wave principle. He “was lionized for calling the stock run-up that began in 1982 and the crash of 1987. Since then his big-picture forecasts have been laughably terrible, with global economic depression continually just around the corner and the Dow headed below 1000,” according to Fortune Magazine. He is particularly well known for his prediction in early 1987 that the Dow Jones Industrial Average would soon reach 3600, and other remarkably bad forecasts In December 1988 he predicted that October 1988 would “kick off the next Great Depression."

He stopped making public appearances in 1989. but he made a comeback in the late 1990’s with the publication of his book The Wave Principle of Human Social Behavior and the New Science of Socionomics . He was still predicting a depression in 2002 “an inevitable stock market collapse that has already begun, an economic depression, and a breathtaking deflation in the prices of most every type of asset. Houses worth $500,000 today will wind up going for $150,000--or less. Banks and insurers will fail.”

Career

Prechter attended Yale University and graduated with a degree in psychology in 1971. His career as an analyst began when he joined Merrill Lynch as a market technician in 1975, where he learned much about the trade from Merrill's Chief Market Strategist Robert Farrell (June 1982). There Prechter also learned of the Wave Principle and was deeply intrigued:

So I tracked down R.N. Elliott's original books. They weren't even in the Library of Congress. But I finally dug around in the New York Public Library and found a catalog card listing a copy of them on microfilm and had photocopies made. I was amazed to find that there was a wealth of information that had been lost to Wall Street.

Prechter has also said, "after I decided to make markets a career, I realized that mass psychology is what they're all about."

Prominence

In 1979 Prechter left Merrill Lynch and published the first subscription issue of the Elliott Wave Theorist. The 1970s had been very bullish years in the gold market but mostly bearish for stocks, yet his Elliott wave analysis called for a long-term reversal lower in gold (February 1980) and a long-term "super bull market underway" in stocks (October 1982). Because these forecasts proved mostly correct -- especially for the stock indexes -- Prechter's following grew. His visibility increased further after he won the U.S. Trading Championship in 1984, with a then-record 444% return in a monitored options trading account. He was profiled in many financial and business publications, and named "Guru of the Decade" by the Financial News Network (now CNBC).

In recent years he has been forecasting a large-scale bear market. Perhaps his most unusual prediction, made in the late 1980's, was about himself, predicting that he would call a stock market top too early.

Prechter has authored or edited 14 books, including Conquer the Crash, a New York Times bestseller. He has also published monthly financial commentary in the Elliott Wave Theorist since 1979. In recent years Prechter has supported the study of socionomics, a theory about the dynamics of human social behavior.

Among the books he has authored, coauthored, or edited are:

• Elliott Wave Principle: Key to Market Behavior
• The Wave Principle of Human Social Behavior and the New Science of Socionomics
• Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression

Notes

1. ”The Wheelers, the Wavers, and the Star-Struck” by Colvin, Geoffrey, Fortune; 10/16/2000, Vol. 142 Issue 9, p84-84, 1p, 2c
2. "Robert Prechter sees his 3600 on the Dow--But 6 years late" by Power, William, The Wall Street Journal, Aug 19, 1993
3. “Lost Sheep Investors Find New Bo-peeps” by Kevin G. Salwen, The Wall Street Journal, July 28, 1989
4. “Bears Will Be Right On Stocks Someday, Just You Watch --- So They Missed 5,000 Points, It's No Reason They Ought To Stop Prognosticating” by Robert McGough, The Wall Street Journal, July 17, 1997
5. ”Game Over” by Kurson, Ken, Esquire; Feb99, Vol. 131 Issue 2, p44, 4p
6. ”Advisory Newsletters Don't Seem to Be Providing Quality Assistance Traders Seek from Them” by Angrist, Stanley W, The Wall Street Journal, Feb 5, 1990
7. “Doomsayers Now Are Salient Among Market Bears” by Constance Mitchell, The Wall Street Journal, Dec 27, 1988
8. 'Elliott Wave' Forecaster Ends Public Appearances, The Wall Street Journal, March 10, 1989
9. “Lend Half an Ear to This Doomsayer” by Barker, Robert, Business Week; 7/22/2002 Issue 3792, p90-90, 1p, 2c
10. ^ Elliott Wave Theorist. (Elliott Wave International, P.O. Box 1618 Gainesville Georgia 30503).
11. ^ Robert R. Prechter, Jr. Prechter's Perspective (New Classics Library, 1996/2004, P.O. Box 1618 Gainesville Georgia 30503) p. 6, 1.
12. Futures magazine, March 1985 p. 66.
13. Atlanta Journal Constitution, July 15, 1990.
14. New York Times, Book Review, Best Sellers List, 11 August 2002.
15. The Wave Principle of Human Social Behavior and the New Science of Socionomics (New Classics Library, 1999, P.O. Box 1618 Gainesville Georgia 30503).

References

Elliott Wave Theorist (Robert R. Prechter, Jr., 1979-2006). Elliott Wave International, P.O. Box 1618 Gainesville Georgia 30503

• American writers
• Living people