Robert Prechter on Monday moved to 200% short

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ANNANDALE, Va. (MarketWatch) -- It might not exactly be news that Robert Prechter, the famous follower of the Elliott Wave theory, is bearish on the U.S. stock market.

That's because he has been playing the equity market from the short side for quite some time now.

But what is news is that, earlier this week, he became even more aggressively bearish than usual: He is now recommending that traders allocate 200% of their stock trading portfolios to shorting the stock market.

What should be your response to Prechter's latest advice?

There is no easy answer, unfortunately.

But this question does raise a whole range of fascinating issues having to do with how best to interpret not just his, but any adviser's, track record.

On the one hand, Prechter's advice over the last couple of years has been top-rated. It's not just that he was bearish during the financial meltdown -- he also did a good job of playing the various intermediate-term corrections along the way.