Robert Prechter, Socionomics expert fears a historic sentiment so extreme it happens "only once in centuries"

Robert Prechter did not invent the Elliott Wave principle, a technical tool for analysing markets  but he certainly has made it famous in Socionomics and through its use in making his market calls which he gets right occasionally. He also writes books and publishes a periodical called the Elliott Wave theorist. An article in the latest (April 2013) issue of the Elliott Wave theorist had me sitting up and taking notice because of a claim it makes that is so outrageous it at least deserves mention, well, in a blog piece anyway. In this article, Mr. Prechter argues, that not a single investment market – be it bonds, stocks, real estate, commodities or precious metals – stands anywhere near a major bottom today, this claim is ok so far, I agree with this part. Its the next statement that is jarring "Every one of them continues to show characteristics of being on the left or right side of a historic top of sentiment so extreme as to occur on average only once in centuries". Mr. Prechter has cited the example of Cyprus when the debt pyramid imploded: "the only valuable asset is cash; if you have it, you are king; if you don’t, you could starve." Either this is fear-mongering designed to sell more of Mr. Prechters' books and periodicals or perhaps there is a genuine warning about an impending implosion in all the investment markets in the near future. Mr. Prechter himself readily admits that he mistimed this call three years in a row but now seems fairly convinced that this "once in centuries" implosion is lurking around the corner.

Societe Generale analyst Albert Edwards repeats call for S&P to drop to 450

The bears seem to be coming out of the woodwork in droves. The latest being Albert Edwards of Societe Generale who famously called for the S&P to drop below March 2009 lows back in May 2012 (see video). This week Mr. Edwards repeated his call for the S&P to drop to 450. In a report titled We still forecast 450 S&P, sub-1% US 10 year yields, and gold above $10,000 released this week “There are some ever-present truths in this business. Economists usually forecast a return to trend growth and will never forecast a recession. Equity strategists tend to forecast the market will rise 10% each year and will never forecast bear markets.” Well, apparently Mr. Edwards strongly believes in being the contrarian. Last year his call was completely wrong, will he get it right this time around? There is mounting evidence to suggest that his call may again be wrong this year but then every contrarian does have his day. Time will tell if Mr. Edwards' call proves to be correct or if he will be forced to repeat this call again next year this time around.

How to use the downfall of gold to your advantage

Already invested in Gold and don't know what to do? A number of options are available depending on how you are invested in Gold. If you have physical Gold - coins, bars, medallions, etc. - do nothing. In this instance you are using physical Gold as a holder of value and that's what it will continue to do albeit not as much value as before. If you have Gold in the form of shares in a Gold or Gold underpinning fund, best to move this move fund into a retirement account as a diversifying asset class to your retirement portfolio. In any case there is no need to panic and sell on the downturn.

When will the current market bubble in stocks and bonds end?

David Stockman, former budget director in the Ronald Reagan administration wrote an article in the New York Times on Easter Sunday entitled "Sundown in America" where he has given a brief history of the various market bubbles since the 1970s when the big Wall Street banks essentially turned the US economy into a giant casino driving booms and busts. He ends the article on a very ominous note reproduced here "there are trillions of dollars of assets, from Shanghai skyscrapers to Fortune 1000 stocks to the latest housing market “recovery,” artificially propped up by the Fed’s interest-rate repression. The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is."
This view has been challenged by the pollyannish talking heads at Bloomberg citing assorted University professors challenging Stockman's view (see video). I personally am inclined to agree with Stockman about the bubble - it will be rather curious to see when this on will burst.