Why Economic Forecasts Often Fail

Linear thinking often utterly misses the mark in financial forecasting.
Let's begin with a paradox -- the one constant in our society is dramatic change. This is the main reason why projecting present conditions into the future often fails.
http://www.elliottwave.com/freeupdates/archives/2010/04/09/Why-Economic-Forecasts-Often-Fail.aspx

The "rare wave formation" described in January Theorist: Did it give a false alarm?
The Januray EW Theorist said: "he third zigzag, wave (Z), is ending with a contracting triangle and a diagonal, as shown in Fig 1. A triangle always precedes the final wave in a sequence, and a diagonal is always an ending wave. It is a rare pleasure to find these two forms adjacent to each other. The EWT documented this occurrence only once before, at smaller degree, in June 1986." With the S&P now at 1173 and Dow at 10,895, what is Bob Prechter's take on this formation. Did it give a false alarm? It would be helpful to get his insight on this.