“Friends of Fed chief Ben Bernanke say that Bernanke may not want a second term as Fed head. The Russell opinion is that Bernanke realizes that he is losing his war against the primary trend, and that he has had enough.” “I believe the bear is angry and is re-establishing himself.”
“Many subscribers think that Richard Russell is a perpetual bear and that nothing will turn him bullish. They could not be more wrong. I call ’em the way I see ’em. In 1957 I built my business on my lone bullishness, and I wrote a bullish article for Barron’s in late 1957 which sought to prove that a bull market was still in force, despite almost universal bearishness at the time (the nation was in the throes of a severe recession at the time).”
“Back in late 1974, I stood alone as probably the only bullish analyst in the business. What I mean to say is that I call it the way I see it, based on my own reading of the market, and regardless of what the popular opinion is at the time. Frankly, I would love to be bullish today, for the sake of my business and for the sake of my five children and for the sake of the United States, the land that I love.
I’ve stated that a primary bear market started in October 2007, with the Dow at 14,164, and that the same primary bear market is still in force. The period of 2009 to its recent high was an upward correction, a ‘breather’ that came within the confines of the continuing bear market.
As I write this, I believe that the bear market is resuming. The ‘breather’ convinced many experts and name analysts that a new bull market had arrived. I disagreed. The Bernanke Fed came in with their QE4 to infinity, and that further convinced many analysts that the worst was behind us and that the Fed had the situation well in hand.
I said that we were seeing a contest between the Federal Reserve along with their manipulative efforts versus the great primary trend of the market. The more powerful of the two would be the winner. Of course, the Fed was fighting one of the most flagrant series of non-confirmations in the D-J Averages that I have ever seen.
The Dow plowed higher until it appeared that a new high in the Dow was almost guaranteed. Then, at the last minute, the market turned down, which is where we are now. As I write the Dow is down 208 points. Over recent days, the Dow has lost almost 500 points. Thus, I believe the bear is angry and is re-establishing himself.
The period between now and election time will be beyond ordinary analysis. Whether the Federal Reserve will intervene is open to question. Now something new has been added. Friends of Fed chief Ben Bernanke say that Bernanke may not want a second term as Fed head.
The Russell opinion is that Bernanke realizes that he is losing his war against the primary trend, and that he has had enough. He is ready to bow out gracefully. Thus, the Bernanke Fed may be content to step aside and allow the stock market to have its way.
(Monday), I said that I wouldn’t put it past the Fed to buy Dow stocks near the close. At one point yesterday, the Dow was down over 100 points. It struck me as very strange to see the Dow drift back to minus 10 near the close, and then at the last minute the Dow turned plus by 2 points. And this with NYSE breadth down.
Therefore, I cannot imagine a better time for the Fed to come in and buy Dow stocks or maybe buy the DIAs. And no, I’m not getting paranoid. It’s getting so that I just don’t believe anything that comes out of Washington anymore.
To put it mildly, with multi-billions of dollars involved in this crazy election, why wouldn’t the Fed be manipulating the market? The Fed has bought just about everything else, so why not the Dow?
Therefore, I cannot imagine a better time for the Fed to come in and buy Dow stocks or maybe buy the DIAs. And no, I’m not getting paranoid. It’s getting so that I just don’t believe anything that comes out of Washington anymore.
To put it mildly, with multi-billions of dollars involved in this crazy election, why wouldn’t the Fed be manipulating the market? The Fed has bought just about everything else, so why not the Dow?
The chart below brings the Dow up to date. The Dow is now trading completely under its 50-day moving average. RSI and MACD are at about oversold, so it would not be surprising to see the Dow rally a bit from here.
Late Notes — Gold at 1709, and still testing its 1700 support level. It’s amazing how gold dribbles down day after day but still holds its 1700 support level — at least, so far.”
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