Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

[metalman]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

With all due respect, Fred, Russell said:

"Just as for years I asked, cajoled, insisted, threatened, demanded,
that my subscribers buy gold, I am now insisting, demanding, begging
my subscribers to get OUT of stocks (including C and BYD, but not
including golds) and get into cash or gold (bullion if possible)."

I threw in with EJ years ago, but Russell is also generally correct within his field.

but why keep gold stocks? they got pounded in 2008? ej said they'd get whacked with other stocks & that was so...

[metalman]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Russell said to get out of stocks, but not gold stocks. When the market tanked in 08, gold stocks took a bath and led the market down. He must think that the drop will be so bad that gold stocks will decouple from the rest of the stock market... That seems like a pretty drastic prediction.

sounds wrong...

[charliebrown]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

good point, thanks for reminding me.
maybe... this time is different.
I think the sheeple are waking up.

[BlackVoid]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

but why keep gold stocks? they got pounded in 2008? ej said they'd get whacked with other stocks & that was so...

Gold got pounded in 2008 too. Since then, it has decoupled from the stock market and the dollar as well. I am not saying gold stocks are good, but that it is possible that gold stocks decouple from the market. Still, I would prefer gold to gold stocks.

[cjppjc]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

I have owned gold and silver stocks for a long time now. The idea that they will decouple in a stock market meltdown is wishful thinking.

[DRumsfeld2000]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

I am a subscriber to Russell.As regards holding gold stocks he says that after the last fall they were one of the fastest to recover. He also believes that when the market falls, gold stocks will be affected the least ie they will still fall (less than the general market) but recover the fastest.

As regards deflation v inflation the point is that Bernanke will print money to try and prevent deflation. RRs view is that Bernanke has stated that he could have prevented the last depression by simply printing money. RR does not believe this. He thinks that we will get deflation due to the debt levels. The death of fiat currencies will result due to huge devaluation and gold will be the last man standing. Makes sense to me. I will buy more gold on the dips and keep my gold shares and add to them as well.

I was surprised as RRs call as he is normally more sanguine. He is normally an optimistic guy but I think he is right. His timing may be a few months out but his daily commentaries make a lot of sense to me. This is from someone who has criticised RR for being too optimistic in the past!

[rabot10]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

I have owned gold and silver stocks for a long time now. The idea that they will decouple in a stock market meltdown is wishful thinking.

lol now that's the truth!!!

[LargoWinch]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

One more day like today and we are at the May 7 low. Given Russel's record, this does give me pause. I used to read him with some frequency and have never heard this tone from him

On May 9, 2010 Marc Faber issued a special - and somewhat rare - notice to its GDB's subscribers to sell stocks.

[we_are_toast]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Europe cutting it's spending, Britain about to cut spending, China cooling it's spending, and next year it will be the U.S. turn. Call it deflation or call it extended disinflation, but you sure can't call it POOM. This is looking a bit like 1937. It's an opportunity to get into oil and more gold but it's going to be a roller coaster ride for awhile.

[thriftyandboringinohio]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

One more day like today and we are at the May 7 low.

Keep in mind that Russell's methods look at both DJ Industrials index and DJ Transport index. I'm neither a subscriber nor a student of RR, but as I understand him both indices must confirm any shift.
The May 7 lows were:

DJI 10,380
DJT 4,298

[Starving Steve]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

lol now that's the truth!!!

I owned gold stoxx for a few years, and they paid miniscule dividends while the companies made fortunes. Meanwhile, gold gained, but the stoxx lagged. "I've been there, done that." And I won't go that route again.

Meanwhile, GE to-day is buying-back its own shares. This is exactly what I like to see: companies that are hated buy-back their own shares.

When would BP buy-back its own shares? With gold at $1200, when might the Fed buy-back its own dollars and maybe pay in gold? :confused:

[dcarrigg]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

What administration in its right mind would target Q3 for GDP contraction?

I would venture to guess that the chart below is premature by a quarter. There is still much money tied up in bureaucracy that will be targeted to be pushed out by the end of Q3. After November, we shall see...

Russell has called for deflation for some time. This is the most specific and drastic call yet, a "double down" on previous incorrect calls.

We think he's right about getting out of stocks and that there is "something wrong" but it's not a deflation risk. The gold market has it right. The reason the DOW is falling is as we explained in The Next Crash - Part I: How the First Bounce of the Debt Deflation Bear Market Ends published when the DOW was still above 11,000 is a combination of factors that Goldman Sachs predicted well over a year ago: stimulus will by Q3 2010 begin to exert a negative impact on the economy:

Chart from
Everyone is wrong, again – 1981 in Reverse Part I: The Great Divide – Eric Janszen

The drag on the economy that Goldman projected is that created when public debt crowds out private debt. We are working on a "Everyone is wrong" update to see where we are in the epiphany process.

[thriftyandboringinohio]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Keep in mind that Russell's methods look at both DJ Industrials index and DJ Transport index. I'm neither a subscriber nor a student of RR, but as I understand him both indices must confirm any shift.
The May 7 lows were:

DJI 10,380
DJT 4,298

Both spent a little time below these levels mid-day, but pulled back above after lunch. The NY close is what I think RR uses.

[thriftyandboringinohio]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Keep in mind that Russell's methods look at both DJ Industrials index and DJ Transport index. I'm neither a subscriber nor a student of RR, but as I understand him both indices must confirm any shift.
The May 7 lows were:

DJI 10,380
DJT 4,298

Close today was:

DJI 10,444
DJT 4,375

Required loss from here to meet Russell's criteria:

DJI 0.6 % down
DJT 1.8% down

[charliebrown]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

If gold is "confiscated" again (or taxed to oblivion) maybe ... maybe the stock ownership will still be allowed.
Additionally, stock gains are taxed better at capital gains rates, and I have been successful in
generating income using a covered call strategy.

If i did not fear federal medling. I would not own the stocks. One must keep one eye open however.
This means spreading ones bets not only in the market, but from a taxation, and legal points as well.

sigh it is a sad day in america when I must make contingency plans because of a potential gvt take away.