ajtj99's Market Pulse

[finally]

He's usually a little early, but...........

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWCVnODJ3GPA&refer=home

Feb. 24 (Bloomberg) -- Elliott Wave International Inc.’s Robert Prechter, who advised shorting U.S. stocks three months before the bear market began, said investors should now end those bets following the recent market sell off.

Prechter, chief executive of the market forecasting firm, warned in this month’s ‘Elliott Wave Theorist’ that a rebound in stocks could be “sharp and scary” for anyone who is so-called short. In a short sale, investors borrow stock and agree to sell them at a later date on hopes of capturing profit by replacing the shares after prices fall.

“This is an environment of escalating financial chaos,” wrote Prechter who first shot to fame in the 1980s after cautioning investors that stocks would crash two weeks before Black Monday. “Our main job is to keep the money we have. If we exit now, we will do that.”

JPMorgan Chase & Co.’s U.S. equity strategist Thomas Lee today issued a “trading buy” recommendation on the Standard & Poor’s 500 Index as the measure yesterday tumbled to a 12-year low at 743.33 points. Lee set a “short-term” target of 800.

The S&P 500 has sunk 52 percent since its October 2007 record high as financial firms worldwide notched up $1.1 trillion in credit-related losses and the world’s largest economies fell into the first simultaneous recessions since World War II.

In July 2007, Prechter advised shorting U.S. stocks saying “aggressive speculators should return to a fully leveraged short position.” He yesterday recommended investors cover that position.

“The market is compressed,” Prechter said in the note published yesterday. “When it finds a bottom and rallies, it will be sharp and scary for anyone who is short. I would rather be early than late.