Richard Russell has been bullish Gold since $250. He is also 88 years of age and has an enormous amount of experience with both Bull and Bear Markets, and how they unfold. He has been analysing, writing and advising his subscribers about markets in his Dow Theory Letters every business day for more than 50 years:
“Where’s gold going? — As you can see on the chart below, gold has formed an almost perfect rectangle. The top of the rectangle has been tested three times, and each time gold was turned back.”
“Obviously, there are some powerful groups (the shorts) that do not want to see gold move into and above the 1800s. At the bottom of the rectangle, gold has found support at approximately 1575.
For the last two weeks, gold and the dollar have moved in unison, which is most unusual. At the bottom of the chart we see the slow stochastics, which are in the neutral or middle zone. Since the bull market in gold is still in force, I would expect gold, ultimately, to break up and into the 1800 + zone.
One caveat — After rising for 12 years in a row, I expect the bull market in gold to produce a final upside blow-off. Bull markets don’t usually die with a whisper and a snore. Often prior to a final upward explosion, we will see a sharp correction, and I have expected something like that for gold. The final correction serves to clear the air and readies the market for a climactic rise.
One reason why we may not see the usual correction in gold is that most of the world’s central banks are now accumulaters of gold on any weakness. Both China and Russia are now eager buyers of gold — both have a small percentage of gold in their reserves.
It’s also significant that most Americans are afraid of gold, even though it has risen year after year for twelve years. Imagine the following a stock would enjoy if a given stock had risen twelve years in a row.
Since when does making money make one a sage? Ever since Warren Buffett bought a chunk of the Washington Post, he’s turned himself (or the media has turned him) into an oracle. Buffett says, yes, we should “tax the rich.” That doesn’t concern Buffett, who could drop a few billion and not know it.
Buffett may be a great company-picker, but when it comes to taxes and government, he’s no oracle in my eyes. Of course, I’m bitter. I bought ten shares of Berkshire at $250 a share and sold them when the stock hit $500. Who knew? Who ever knows? Actually, I bought the shares of Berkshire so I could read Warren’s annual report.
In the 1974 bear market, Berkshire’s shares dropped in half. I wonder how many BRK followers held their stock through the 1974 disaster?
Question –Why is gold the ultimate safe-haven investment?
Answer — Because gold is the only item that can’t go bankrupt. For thousands of years, gold has been treated as pure wealth.
Irony — The lust for gold opened up the American West. In 1849 men left their wives and families and homes and headed West in the hope of finding gold. Yet today, most Americans would not swap their intangible, unbacked dollars (Federal notes) for gold.
For a dozen years, Americans have turned their backs on an item that has risen to new highs each and every year. The stage is set for a huge reversal in sentiment. My intuition says the turn will come between now and 2015.”
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Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.
Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Through Barron’s and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974.
The Letters, published every three weeks, cover the US stock market, foreign markets, bonds, precious metals, commodities, economics –plus Russell’s widely-followed comments and observations and stock market philosophy.
In 1989 Russell took over Julian Snyder’s well-known advisory service, “International Moneyline”, a service which Mr. Synder ran from Switzerland. Then, in 1998 Russell took over the Zweig Forecast from famed market analyst, Martin Zweig. Russell has written articles and been quoted in such publications as Bloomberg magazine, Barron’s, Time, Newsweek, Money Magazine, the Wall Street Journal, the New York Times, Reuters, and others. Subscribers to Dow Theory Letters number over 12,000, hailing from all 50 states and dozens of overseas counties.
A native New Yorker (born in 1924) Russell has lived through depressions and booms, through good times and bad, through war and peace. He was educated at Rutgers and received his BA at NYU. Russell flew as a combat bombardier on B-25 Mitchell Bombers with the 12th Air Force during World War II.
One of the favorite features of the Letter is Russell’s daily Primary Trend Index (PTI), which is a proprietary index which has been included in the Letters since 1971. The PTI has been an amazingly accurate and useful guide to the trend of the market, and it often actually differs with Russell’s opinions. But Russell always defers to his PTI. Says Russell, “The PTI is a lot smarter than I am. It’s a great ego-deflator, as far as I’m concerned, and I’ve learned never to fight it.”
Letters are published and mailed every three weeks. We offer a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $300, tax deductible if ordered through your business).
IMPORTANT: As an added plus for subscribers, the latest Primary Trend Index (PTI) figure for the day will be posted on our web site — posting will take place a few hours after the close of the market. Also included will be Russell’s comments and observations on the day’s action along with critical market data. Each subscriber will be issued a private user name and password for entrance to the members area of the website.
Investors Intelligence is the organization that monitors almost ALL market letters and then releases their widely-followed “percentage of bullish or bearish advisory services.” This is what Investors Intelligence says about Richard Russell’s Dow Theory Letters: “Richard Russell is by far the most interesting writer of all the services we get.” Feb. 19, 1999.
Below are two of the most widely read articles published by Dow Theory Letters over the past 40 years. Request for these pieces have been received from dozens of organizations. Click on the titles to read the articles.
