Russell: “An hour before the close (on Friday), the Dow was up 120 points, with substantially less volume. This told me that institutions were selling into the rally. The Dow closed slightly off its high. I call this a poor day, accented by institutional selling. Gold had its best day since last August, closing at a new high for the move.
I think gold is overbought now, with many Johnny-come-latelies belatedly advising positions in gold. Today there was a full-page ad in the New York Times advertising “bargain gold.” This too suggested that gold, after its excellent rally, is now overdue for a rest.
In the big picture, I continue to believe that we’re in a world depression. This will be followed by frantic activity by the Fed, as it prints new trillions of dollars. Which I’m certain, by the way, is why gold has been rising. I think we’re at the inflection point where the primary bear trend is overcoming the frantic action of the Fed.
For years the Fed has been trying to establish its objective of 2% inflation. But the global deflationary pressures have thwarted the Fed. The dollar is key here. If or when the dollar index closes under 80, I think we will see fireworks in gold.”
More: “Despite government Fed lies and propaganda, I will repeat my take on the present situation. The world is in a continuing depression, and only the vanishing US middle class is aware of it. The Fed and the government are feeding an unending parade of lies to the American people.
Once the actual facts emerge to the newspapers, I expect Janet Yellen to buy Treasuries at a greater rate than we’ve seen so far. And at the same time, she will be creating new trillions of dollars without end. Rising gold is anticipating these future Fed moves. But rising gold will be a red flag for all to see. I look for the dollar index as a first sign of the Fed’s helplessness in the face of the ongoing world depression.
So far, the dollar index has clung to a price of $80 plus. I believe a break of the $80 support level for the dollar will be a sign that the Fed is losing its battle. The powerful performance of gold for weeks and weeks is a subtle sign that the Fed has already lost its grip. A position in gold is a position against the Federal Reserve.
Unfortunately for the Fed, gold is traded across the face of the planet. And currently gold is telling us the truth about the Fed’s money creation. I continue to like CEF as a security beyond the reach of the Fed and the government. As noted yesterday, most gold items are now in the process of breaking out of their bases. A vote for gold is a vote against central bank planning. Gold will forever be a hated item in the eyes of central planners.”
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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.”
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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.
“Rich Man, Poor Man (The Power of Compounding)“
