By Carl Watner

[Editor’s Note: This article was started in early February 2009, after the election of Obama, after world stock markets had lost some $ 32 trillion dollars in value, and before the great stimulus package had been hammered out. The Dow Jones Industrial Average stood just above 8,000. It will likely be posted on the worldwide web in the next few months. However, subscribers will probably not read it in their newsletters until sometime in 2010. Please keep this dating in mind, just in case the economic and political conditions under which it was written change, either for the better or the worse.]

Can you identify the author and the date of publication of the following book excerpt:

An increase in the supply of money [and credit] depends mainly upon borrowing. Unless the psychology of the American consumer can be turned around, consumers will not start new borrowing that will create more new money. Until consumers start to demand more and buy more, business will not expand more. Therefore business will not borrow more. Therefore, in spite of the great increase in the money supply caused by the Federal deficits, the total money supply will continue to shrink. As it shrinks it will bring about bankruptcies, and these bankruptcies will cause others, which will end in a great domino display of deflation. The destruction of money will far outpace the manufacture of money by the Fed, and we shall be plunged into the worst depression in the history of the world. [1]

Any guesses: Murray Rothbard, AMERICA’S GREAT DEPRESSION, 1963; Harry Browne, HOW YOU CAN PROFIT FROM THE COMING DEVALUATION, 1970; Alexander Paris, THE COMING CREDIT COLLAPSE, 1974; James Dines, THE INVISIBLE CRASH, 1975; C. V. Myers, THE COMING DEFLATION, 1976; Robert Prechter, AT THE CREST OF THE TIDAL WAVE, 1995, and CONQUER THE CRASH, 2002; Roger Bootle, THE DEATH OF INFLATION, 1996, and MONEY FOR NOTHING, 2003; Nouriel Roubini and Brad Setser, BAILOUTS OR BAIL-INS, 2004? Well, you had no idea there were so many doomsday Cassandras, did you? If you guessed Robert Prechter (because he is mentioned in my subtitle), you were wrong. The quote is actually from C.V. Myers, whose biography, FIFTY YEARS IN THE FURNACE (1989), I reviewed in December 1990, in Whole Number 47.

Now what was the point of this little quiz? It simply is to observe that there have been a number of economists and investment advisors who predicted a second Great Depression. Every one of these authors recognized that “every financial mania in history has been followed by a commensurate bust,” but only two or three of them were so astute as to get their timing close to the event. [2] Myers, as we can see, was thirty-two years ahead of his time. Of the list I presented, only Bootle, Roubini, and Prechter were within ten years of an accurate prediction. Of these three, not only is Bob Prechter a long-time subscriber to THE VOLUNTARYIST, but he is the only one to have fleshed out a theory of mass human behavior which links human emotions and psychology to the credit booms and busts we have recently experienced.

How did Bob Prechter become the world’s best known advocate of Elliott wave theory, one of the few economists to anticipate a deflationary depression, and a voluntaryist, to boot? Born in 1949, Bob is father of two grown children. He attended Yale University on a full scholarship and graduated in 1971 with a degree in psychology. After an interlude as a drummer in a rock band, he joined Merrill Lynch as a market technician in 1975. His father was a student of finance and the stock market, and on his dad’s advice, Bob invested in South African gold stocks a year after his graduation. Within sixteen months he had quintupled his money and he was drawn inexorably toward the stock market as a career. (It appeared potentially more profitable than making music.) While at Merrill Lynch, a friend gave him a “barely readable photocopy of Hamilton Bolton’s 1960 book” about Ralph Nelson Elliott, who had charted stock prices throughout the Great Depression. [3] Elliott (1871-1948) was a professional accountant who had worked in the restaurant industry and for the U.S. State Department in Nicaragua during the 1920s. While recovering from a serious illness, he discovered the fractal nature of stock prices. He subsequently wrote two books, a series of articles, and over 100 newsletters describing the wave-like structures he observed in his research. Bob found Elliott’s theory intriguing because of his own personal interest in human psychology, and because no other theory of market behavior had ever come close to matching the accuracy of the forecasts of the Elliott Wave Principle. Prechter began charting stock prices himself, and eventually teamed up with A. J. Frost, another Elliottician, in 1978, to co-author THE ELLIOTT WAVE PRINCIPLE. This is “the only book in stock market history” to have forecast not only a great bull market but its subsequent complete retracement. [4] Part 2 of that forecast seems to be happening now. Prechter later developed his thesis of a deflationary depression in his 1995 book, AT THE CREST OF THE TIDAL WAVE: A Forecast for the Great Bear Market, and in his 2002 book, CONQUER THE CRASH: You Can Survive and Prosper in a Deflationary Depression.

In 1976, while at Merrill Lynch, Bob began writing THE ELLIOTT WAVE REPORTS for the firm. In 1979, he left to start his own publication, THE ELLIOTT WAVE THEORIST. In 1982, THE ELLIOTT WAVE THEORIST called “for the Dow to rise 3000 points from the 900 level.” [5] By 1985, his publication was on its way to becoming the premier, must-read investment newsletter on Wall Street. This came about as a result of word of mouth interest, but also because of Bob’s success in the 1984 options trading division of the U.S. Trading Championship contest. He poured his efforts into the competition, and at the end of the 4 month trials, his account was up 444%. “At the time, it was the highest score in the history of the contest.” [6] About 90% of his financial predictions between 1983 and 1988 were right on the mark. In December 1989, Financial News Network named him “Guru of the Decade.”

However, not all his forecasts were to be so prescient. Despite his earlier successes, and his continued accuracy in forecasting gold and silver (all his commentary appears in HOW TO FORECAST GOLD AND SILVER USING THE WAVE PRINCIPLE), between 1991 and 1999, his stock market predictions were well off the mark.

[A]fter exiting near the [stock market] high in 1987, I concluded after the crash that the bull market was probably over and did not re-enter the market. Even after the market made new highs, the advent of the new horde of green investors, who were buying stocks like catfish in a feeding frenzy, kept me too cautious to recommend buying the market as a whole. [7]

As Bob puts it, the duration of waves is the least predictable element in Wave Principle forecasting, but that doesn’t necessarily destroy its truth or effectiveness. What the Wave Principle “provides [is] an objective means of assessing the relative probabilities of possible future paths for the market.” [8] The Wave Principle unequivocally encouraged him to stick to his guns, even if his timing was years early in predicting disaster. In fact, that is one personality trait that had been with him for years. “[W]hile attending summer school [in his teens] with the Georgia Governor’s Honor Program, [he] was given a psychological test and told that one of [his] skewed traits was ‘tough-mindedness.'” From his adult perspective this was a benefit: if you think the stock market crowd is on a binge and about to stampede over the cliff, the time to depart is well before it reaches the precipice. Better a year too early, than a day late. [9]

Bob’s interest in Elliott was undoubtedly sparked by his college studies in psychology, As Bob describes himself:

I am an observer of crowd behavior. … In my opinion, all history flows from the truth that men have a nature, that this nature produces patterns of interaction, and that these patterns of interactions produce results. Elliott broke major ground in the field of sociology when he showed that behavioral patterns inherent in human interaction shape financial events. I would add that they shape all collective events and trends. [10]

“Ralph Nelson Elliott’s great insight,” was that “financial markets have a specific organizational law of patterned self-similarity,” and that “social or crowd behavior trends and reverses in recognizable patterns.” [11] He identified 13 patterns or waves that recurred in the market data he studied during and after the Great Depression. Mankind’s progress, he noted, is not in a straight line, but neither does it occur randomly or cyclically, “Rather progress takes place in a three steps forward, two steps back fashion, a form that nature prefers.” [12] “In the biggest imaginable picture the trend is always up, according to the Wave Principle. Mankind is on an upward path, with corrections along the way as he moves through history.” [13]

Prechter, building on Elliott’s work, recognized that there must exist an unconscious herding impulse within humanity that impels trends in social mood. He proposes that this herding impulse is central to the working of the economy and valuations in the stock market. The herding instincts of early man are still apparent in today’s world. “Herding is an unconscious impulsive behavior developed and maintained through evolution.” [14] The knowledge that others’ investment decisions can determine their own success or failure creates an environment of uncertainty, in which people are ripe for taking cues for their own actions from others. “Herding induces feelings of safety and well-being” so investors whether buying or selling with the herd “are always acting unconsciously to reduce risks, thanks to the emotionally satisfying impulse to herd.” When humans do not know what to do “they sometimes act as if others do, and follow them as if following the herd” – even though “they don’t realize that most others in the herd are just as uninformed, ignorant, and uncertain as they are.” Herding occurs in a rising stock market. Buyer’s think, “‘The herd must know where the food is. Run with the herd and you will prosper.’ Sellers in a falling market appear to think, ‘The herd must know there is a lion racing toward us. Run with the herd or you will die.'” [15]

Combining observations from both sociology and economics, Prechter has developed a theory of socionomics to explain the relationships between the stock market, society, popular culture, and government. His basic “socionomic” insight is that social events do not shape social mood, but rather the herding impulse and social mood shape events. “Major historic events which are often considered important to the future (i.e., economic activity, lawmaking, war) are not the causes of change; they are the result of mass mood changes that have already occurred.” [16] The market does not respond to outside events, such as natural disasters, the outcome of political elections, revolutions, or wars. Rather, “collective psychology is impulsive, self-generating, self-sustaining, and self-reversing. … Events that make history are the result of mass mental states that take time to develop. This is the only possible explanation for the constancy of structure and consistency of pattern that markets reveal.” [17]

Prechter points out that most people believe that history shapes social mood, whereas the truth is exactly the opposite: collective mood shapes history. The stock market, in which people can express their moods nearly instantaneously, is a register of social mood and the mass emotional outlook. In other words, the stock market goes down because people’s mood has changed from optimistic to pessimistic. “An increasingly optimistic populace buys stocks and increases its productive endeavors. An increasingly pessimistic populace sells stocks and reduces its productive endeavors.” [18] “The cause of future events is changes in the mass emotional outlook. That … comes first. … People’s emotional states cause them to behave in ways that ultimately affect economic statistics and politics.” [19] For the overall social mood to change, “all that is required is for some particularly susceptible people to undergo a substantial change in mood, and/or for most people to undergo some [small] change in mood.” [20]

This interpretation of mass psychology and financial events is particularly applicable to today’s debate among free market advocates as to whether deflation or inflation will rule the day. As one commentator has calculated: the world stock market has lost $ 30 trillion in value during the last year; the world housing market has suffered a net loss of another $ 30 trillion. “This doesn’t even include the losses from other asset classes that have been decimated, such as corporate bonds, commodities, and commercial real estate.” [21]

Can the United States government and the Federal Reserve in Washington jump start the economy – even with a trillion here or a trillion there, when worldwide losses are of such a magnitude? Furthermore, how effective can the government be in changing social mood? Despite what most people think, government officials do not affect trends; they only react to them. Prechter’s observations are confirmed by the Japanese experience of the last two decades. Neither the Bank of Japan or the Japanese Ministry of Economics have been able to “inflate” their economy out of its doldrums. [22] Is it true, as most people believe, that Federal Reserve officials really know what they are doing? Prechter says they don’t, and labels this popular belief (that they can “direct” the economy) the fallacy of the potent director. [23] Treasury Department and Federal Reserve officials cannot force banks to lend, nor people to borrow if everyone is pessimistic about the future of the economy.

Based on the Wave Principle, Prechter has forecasted a second Great Depression based on the peaking of a wave of a very large size. Never before has an Elliottician been alive to [witness] the termination of a wave structure of this magnitude, when all fifth wave cycles terminate at the same time. Elliott Wave analysis supports the fact that during the last two centuries, the various fifth waves have unfolded according to the rules and guidelines of the Wave Principle. This is a strong indication that the biggest bear market since the 1700s is a reality, and gives credence to Prechter’s ongoing prediction that the Dow Jones Industrial Average will fall back below 1000, and probably to below 400. [24]

As Prechter sees it, the inflation of the past hundred years has been “not primarily currency inflation but credit inflation.” [25] The entire world has been on a credit binge based on the marriage of three institutions: fiat money, fractional reserve banking, and government subsidies for the creation of credit. Gold and silver have gradually disappeared from our monetary system, and have been replaced by irredeemable legal tender paper money. Government legislation and court decisions have built up a system of central banks in every country that operate on minuscule reserves (hence the name, fractional reserve banking). Government and corporate borrowing, housing and real estate mortgages, and personal loans have reached all-time nominal highs, as governments have tried to “buy” public support. The ability of governments, individuals, and corporations to repay their debts is now at all time lows. If borrowers pay back their loans without renewing them, or if borrowers default on their loans, the approximate 600 to 1 fractional reserve multiplier (i.e., for every $ 1 loaned into existence, another $ 600 may be created) goes into a devastating reverse gear. [26] Printed currency stays in the system, but inflated credit can implode upon itself. “Total credit will contract, so bank deposits will contract, so the supply of money will contract, all with the same degree of [reverse] leverage with which they were initially expanded. Th[is] immense reverse credit leverage of zero-reserve (actually negative-reserve) banking, then, is the primary fuel for a deflationary crash.” [27] As Prechter concludes, “Credit deflation is the most devastating financial event of all.” [28]

Of the three items listed in our sub-title to this article, we have discussed Bob Prechter and Elliott Wave theory but what of their relation to voluntaryism? Why should a voluntaryist be interested in these topics, and why should Bob Prechter be a voluntaryist?

As Prechter explains it, initially he was influenced by his father’s support of limited government. Then he began to see government’s negative influence in the running of the courts, the police, and the military. Eventually he reached the point where he could declare himself “100% for voluntaryism.” [29] As an example of this, in 1995, in AT THE CREST OF THE TIDAL WAVE, he wrote:

The only sound monetary system is a voluntary one. … [P]rices should be denominated not in state fictions, such as dollars, yen, or francs, but in grams of gold. Anyone might issue promissory notes as currency, but the acceptance of such certificates would then be an individual decision, and risk of loss through imprudence or dishonesty would be borne only by a few individuals by their own conscious choice after considering the risks. … Thievery and imprudence will not disappear among men, but at least such tendencies in a free market for money would not have the potential to be institutionalized, as they are when a state controls the currency. … [N]ationwide disasters that state controlled money has facilitated throughout history … have … had global repercussions. [30]

A year later in his book, PRECHTER’S PERSPECTIVE, he again wrote that “The only way to guarantee that politicians will never again inflate is to introduce private money and ban legal tender laws.” The production of money would be open to “anyone that wants to issue it! The marketplace will choose the soundest forms of money, and competition will insure that they are produced.” [31]

Prechter has also blasted the idea that “a growing economy needs easy credit.” As he puts it, a growing economy needs wise credit, not easy money. Wise credit can never be administered by those in government. “Credit should be supplied by the free market, in which case it will almost always be offered intelligently, primarily to producers, not consumers. Would lower levels of credit availability mean that fewer people would own a house or a car? Quite the opposite. Only the timeline would be different. Initially it would take a few years longer for the same number of people to own their own houses and cars – actually own, not rent them from the banks. Because banks would not be appropriating so much of everyone’s labor and wealth, the economy would grow much faster. Eventually the extent of home and car ownership –actual ownership – would eclipse that of an easy credit society. Moreover, people would keep their homes and cars because banks would not be foreclosing on them. As a bonus, there would be no devastating across-the-board collapse of the banking system, which history has repeatedly demonstrated is inevitable under a central bank’s fiat-credit monopoly.” [32]

Despite his support for free markets in money and banking, Prechter has noted that “none of this had to do with Elliott waves or socionomics.” Nevertheless, he believes that both are compatible with liberty. They remove “the essential crutch upon which government meddling stands: the idea that social events can change the mood of the public.” It would appear that all governments need to do to succeed is to manipulate events, to improve the public’s mood. “But social mood is endogenously regulated, which means that no [government] can change its path.” [33] In other words, Prechter believes that the “collective unconscious herding impulse cannot be tamed, directed, or managed.” [34] This means that government propaganda will be nearly ineffectual and explains why in George Orwell’s 1984 those in government left the proles to their own designs. “As the Party slogan put it: ‘Proles and animals are free’.” [35]

What is the connection between Elliott wave theory, socionomics, and voluntaryism? As Prechter has explained, the “actions of central authorities are irrelevant to whatever is essential to market behavior”, which means they are irrelevant to social mood.

People today almost unanimously agree that government[s] ….have potent and magic powers to shape macroeconomic forces. The cause of this error is once again the belief in extramarket causality. In fact, it is the interaction of millions of people that sets interest rates and regulates the economy. The power of financial “authorities” to manage markets and economies is like the power of the Wizard of Oz: smoke and bluster. … [I]f there is any result at all, … [it] is to make things worse. [Attempts at control misdirect energy and resources.] Complexity theory recognizes nature’s processes of self organization. It is a short step to realize that society operates the same way. That is why free societies are more successful and productive than controlled ones. They self organize far more efficiently than any human directors could make them do. [36]

So if the actions of government authorities are futile and irrelevant, then they must be unnecessary to the survival of a free society. The lessons are clear: political institutions steal from people; they are ultimately disastrous; and government policies, no matter how well intentioned, make things worse. But why does history repeat itself? Why do we keep having government institutions rule us? Why hasn’t mankind learned from its past? Prechter answered these questions long before he was a voluntaryist. He noted that it is one of nature’s laws that mankind will refuse to recognize and willingly accept all of nature’s laws. In fact, this is part of the reason for the very existence of the Elliott Wave Principle: mankind refuses to learn from its own past. Some men can always be counted on to believe that two and two make five; that man can consume before he produces; that special cases exempt men from nature’s laws; that what is lent never need be paid back; that paper is as good as gold; that benefits have no cost; and that the fears which reason supports will evaporate if they are ignored or derided. [37]

This being the case, is there any reason for optimism? “Yes, continually!” Prechter responds. Knowing that social mood is patterned allows you to anticipate all kinds of social trends, which means you can prosper in any financial environment, or even escape from life-threatening social troubles before they arrive. In other words, Prechter’s theory of Socionomics provides a rational and practical approach to harness and benefit from Shakespeare’s famous observation:

There is a tide in the affairs of men 

Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries.

On such a full sea are we now afloat,

And we must take the current when it serves

Or lose our ventures.

Then, with your will go on. [38]

Boxed Quotes to Accompany This Article:

When the bottom dropped out of the stock market, the wealthy were hit first. But it wasn’t long before the Depression came sweeping through our little town. “The banks went broke and closed their doors. It was hard to believe that the money we’d saved there was really gone.”

– Cecil Culp in WE HAD EVERYTHING BUT MONEY

(Deb Mulvey, editor, Greendale: Reiman Publications, 1992, p. 14).

There are two ways that credit can be liquidated. The first can be by inflation, by increasing the amount of money and credit in existence, so that the value or purchasing power of each unit of money is thereby diminished. A debt of $ 500, which originally would have bought one ounce of gold, is paid off with $ 500 inflated dollars with a purchasing power of 1/100 of the original, of which $ 500 inflated dollars will buy only 1/100th of an ounce of gold. Or the “second way massive debt can be liquidated is through bankruptcy. That is to say, default. A man lent a hundred dollars. The debtor goes broke and says to the man simply, ‘I’m sorry – I can’t pay you back – I don’t have any money’. … [This] means deflation; that is bankruptcy and depression.”

– Paraphrased and quoted from C. V. Myers, THE COMING DEFLATION

(New Rochelle: Arlington House, 1976 [1978], pp. 33-34).

End Notes

[1] C. V. Myers, THE COMING DEFLATION (New Rochelle: Arlington House, 1976, Twelfth Printing, August 1978), pp. 199-200.

[2] Robert R. Prechter, Jr., PRECHTER’S GLOBAL MARKET PERSPECTIVE, January 2009, p. 11.

[3] Peter Kendall, ed., Robert R. Prechter, Jr., PRECHTER’S PERSPECTIVE (Gainesville: New Classics Library, 1996), p. 8.

[4] Frost and Prechter, ELLIOTT WAVE PRINCIPLE (Chichester: John Wiley & Sons, Ltd, 1978, First paperback edition November 2000), p. 239.

[5] Robert R. Prechter, Jr., AT THE CREST OF THE TIDAL WAVE (Gainesville: New Classics Library, 1995), p. 13. In August 1982, the Dow touched down at 777; by the summer of 1987 it was up to 2700.

[6] PRECHTER’S PERSPECTIVE, op. cit., p. 18.

[7] AT THE CREST OF THE TIDAL WAVE, op. cit., p. 203.

[8] Elliott Wave International, “A Capsule Summary of the Wave Principle,” (2008), p. 2. Referenced as “Capsule Summary” in later footnotes.

[9] PRECHTER’S PERSPECTIVE, op. cit., p. 102 and AT THE CREST OF THE TIDAL WAVE, op. cit., p. 216.

[10] PRECHTER’S PERSPECTIVE, op. cit., p. 24.

[11] Robert R. Prechter, Jr., THE WAVE PRINCIPLE OF HUMAN SOCIAL BEHAVIOR AND THE NEW SCIENCE OF SOCIONOMICS (Gainesville: New Classics Library, 1999, Second Printing 2002). p. 6. Also see “Capsule Summary,” op. cit., p. 1.

[12] “Capsule Summary,” op. cit., p. 3.

[13] PRECHTER’S PERSPECTIVE, op. cit., Frontispiece quoting Robert Prechter.

[14] Robert R. Prechter and Wayne D. Parker, “The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective,” being an electronic version of an article published in THE JOURNAL OF BEHAVIORAL FINANCE, Vol. 8, No. 2, pp. 84-108. Page 11 of the electronic version published by Socionomics Foundation, 2009.

[15] ibid., pp. 11-12.

[16] Robert R. Prechter, Jr., PIONEERING STUDIES IN SOCIONOMICS (Gainesville: New Classics Library, 2003), p. 4. Also see “The Direction of Social Causality,” in THE WAVE PRINCIPLE OF HUMAN SOCIAL BEHAVIOR AND THE NEW SCIENCE OF SOCIONOMICS, op. cit., pp. 329-330.

[17] PRECHTER’S PERSPECTIVE, op. cit., p. 35.

[18] Robert R. Prechter, Jr., CONQUER THE CRASH (Hoboken: John Wiley & Sons, Ltd., 2002), p. 18.

[19] PRECHTER’S PERSPECTIVE, op. cit., pp. 183-184.

[20] PIONEERING STUDIES IN SOCIONOMICS, op. cit., p. 5.

[21] Eric Sprott and Sasha Solunac, “So You Think 2008 Was Bad? Welcome to 2009,” Posted February 4, 2009 at www.321gold.com/editorials/sprott/sprott020409.html, page 3.

[22] “But in the early 1990s, the authorities found they could no longer create inflation.” See Akio Mikuni and R. Taggart Murphy, JAPAN’S POLICY TRAP: Dollars, Deflation, and the Crisis of Japanese Finance (Washington, D.C.: Brookings Institution Press, 2002), p. 168. See further development of this point in Footnote 13 to this sentence on pp. 273-274.

[23] CONQUER THE CRASH, op. cit., p. 123, and AT THE CREST OF THE TIDAL WAVE, op. cit., p. 217.

[24] AT THE CREST OF THE TIDAL WAVE, op. cit., pp. 30, 41, and 409.

[25] ROBERT PRECHTER’S MOST IMPORTANT WRITINGS ON DEFLATION, Excerpted from the June 16, 2006 ELLIOTT WAVE THEORIST, p. 37.

[26] See ROBERT PRECHTER’S MOST IMPORTANT WRITINGS ON DEFLATION, November 17, 2005 ELLIOTT WAVE THEORIST, pp. 29-30.

[27] CONQUER THE CRASH, op. cit., p. 111.

[28] ROBERT PRECHTER’S MOST IMPORTANT WRITINGS ON DEFLATION, Excerpted from the March 23, 2007 ELLIOTT WAVE THEORIST, p. 41.

[29] Personal email communication from Robert Prechter, November 2, 2008.

[30] AT THE CREST OF THE TIDAL WAVE, op. cit., p. 359.

[31] PRECHTER’S PERSPECTIVE, op. cit., pp. 194-195.

[32] ROBERT PRECHTER’S MOST IMPORTANT WRITINGS ON DEFLATION, Excerpted from the February 20 2004 THE ELLIOTT WAVE THEORIST, p. 27.

[33] Personal email communication from Robert Prechter, January 7, 2009.

[34] ROBERT PRECHTER’S MOST IMPORTANT WRITINGS ON DEFLATION,

Excerpted from the June 16, 2006 ELLIOTT WAVE THEORIST, p. 38.

[35] George Orwell, 1984 (New York: The New American Library, 28th Printing, December 1962), Part I, Section VII, p. 62.

[36] THE WAVE PRINCIPLE OF HUMAN SOCIAL BEHAVIOR AND THE NEW SCIENCE OF SOCIONOMICS, op. cit., p. 369.

[37] ELLIOTT WAVE PRINCIPLE, op. cit., pp. 169-170.

[38] AT THE CREST OF THE TIDAL WAVE, op. cit., pp. 11 and 21. Taken from JULIUS CAESAR, Act IV, Scene 3.