Stocks have been bullish despite the slow economic recovery. Stock market has been bullish due to the quantitative easing being done by the FED. All the cheap money that the FED has been pumping into the economy was being siphoned into the stock market.
So when the FED stops Quantitative Easing as it has said it is doing now, will the stock market tank? When the FED raises the interest rate, will it kill the bull market? The prospect of rate hikes seems to freak out investors, but historical data shows that bull markets in stocks usually keep on trucking along, albeit with some short-term bumps, once the Federal Reserve goes into tightening mode.
Many analysts have been predicting dooms day scenarios for a long time. Might be they get proved right. One of the dooms day scenario painter is Robert Prechter who is considered to be leading Elliott Wave Analyst in the world. Who is Robert Prechter, and why should investors care that he is warning them to be on high alert for a potential collapse in the stock market?