Bob Prechter: Market Is Reliving Late Stages of 1930′s Depression (TBT, TLT)

Don’t get too comfortable with the relatively flat markets of 2011, there’s a big storm coming our way. This is the view of Robert Prechter, founder and president of Elliott Wave International. In the attached video Prechter compares the current phase of the market to the late stages of the 1929 – 1933 period in U.S. history; a time marked by extreme volatility eventually ending in tears.

“One of the things that happened in 1929 was that a consortium of the biggest banks in the country tried to stop the market from going down,” notes Prechter. Those banks failed of course, just as Prechter says they did when the Central Banks tried to prevent the coming financial meltdown in 2008 by offering essentially free credit.

Prechter draws parallels to April of 1930, 1937, and other periods in which relatively brief recoveries dissolved. Pick a tool, any tool, and Prechter says it suggests a stock market going lower. “Patterns, sentiment indicators, or momentum are all saying the same thing: This is a bear market rally.”

See the full “Breakout” interview below:

Related ETFs: ProShares UltraShort 20+ Year Treasury (NYSEArca:TBT), iShares Barclays 20+ Year Treas Bond (NYSEArca:TLT)

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