Elliott Wave Prediction: Is the Dow Heading for Another Plunge?

Think the market's bad enough now? If you believe the Elliott Wave Principle, a market-analysis theory that predicted the 2008 fall, you can expect it to get much worse.

Stock analyst Robert Prechter, who uses the principle in his financial forecasts at Elliott Wave International, predicts the market will suffer a cataclysmic collapse in the next six years. The firm's monthly Elliott Wave Theorist newsletter forecasts that the Dow Jones Industrial Average ($DJI) will lose more than 90% of its value in that time, MarketWatch reported last week.

For some investors, such pessimism is doubtless difficult to understand. Despite fears of a double-dip recession and frequently disappointing macroeconomic data, an actual decimation of the market seems unfathomable. Even during the Great Recession, the Dow didn't fall below 6,000. Imagine what a full 5,000 points below that would be like. (more)