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

[pianodoctor]

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

Late April 2010 we gave in The Next Crash the straggling stragglers a chance to hang on to 60% of March 2000 S&P500 purchasing power.

Is that an iTulip "call" or not? Because when EJ wrote it was our last chance to short China he later said he didn't really mean it to be a call and he was surprised that anyone would short China based on him saying it was the last chance to do so (I did sell China stocks based on his words). In "The Next Crash", EJ intimated he wasn't really ready to call a downturn, so I didn't get out of what remains in my stock port because EJ said he'd make it real specific if it's time to short. But now you are intimating it was a "last chance" call for stragglers to get out of stocks. So what's the iTulip stance?

[unlucky]

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.

Is what's happening really disinflationary? It's true that the Europeans are cutting their spending, but only because they have been forced to - not because their economies have recovered. That means they must keep loose monetary policy in place to offset fiscal cuts. Witness the ECB's ever-greater interventions, while the BOE write letters to the chancellor explaining why inflation doesn't matter

And China is by all accounts in the grip of a big inflation. They are trying some experimental forms of monetary tightening to control it, but the cat looks to be already out of the bag.

All positive for gold in my opinion..

[jiimbergin]

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

Is that an iTulip "call" or not? Because when EJ wrote it was our last chance to short China he later said he didn't really mean it to be a call and he was surprised that anyone would short China based on him saying it was the last chance to do so (I did sell China stocks based on his words). In "The Next Crash", EJ intimated he wasn't really ready to call a downturn, so I didn't get out of what remains in my stock port because EJ said he'd make it real specific if it's time to short. But now you are intimating it was a "last chance" call for stragglers to get out of stocks. So what's the iTulip stance?

I too shorted China, but EJ did not say it was the last time to short China, what he said was

China is about where Japan was in late 1989 and the U.S. in early 2000, near the top of both stock market and housing bubbles, or at least close enough for the adventurous gambler to short it.

jim

[ThePythonicCow]

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

Is what's happening really disinflationary?

It's only spasmodically disinflationary or deflationary now. The world banks are flooding the balance sheets and cash flows of the "chosen ones", the dominant banks, while they and their government minions tread water with the "economy for the rest of us". They are doing a pretty good job of sterilizing their monetary infusions to the top banks, which means that balancing bookkeeping entries keep the new money balanced with new debt, or falsely valued bad debt, so that just minimal, sustaining debt or money flows down to the rest of us.

However the world financial engine is becoming increasingly unstable. As we_are_toast says, it's going to be a roller coaster ride for a while.

[pianodoctor]

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

I too shorted China, but EJ did not say it was the last time to short China, what he said was

China is about where Japan was in late 1989 and the U.S. in early 2000, near the top of both stock market and housing bubbles, or at least close enough for the adventurous gambler to short it.

jim

Jim, I'm referring to a chart in an article that appeared somewhere in mid 2009. I'm trying to find it but I have to say I find the organization of this website very confusing and I haven't been able to re-locate it as of yet- perhaps someone else would be so kind to give a 'pointer' to that article? Anyway, it was a chart of where the China markets had rebounded to at that point. He circled the point on the chart and labeled it in bold 'second and last chance to short China" or words very close to that and identical in meaning. If I'm not mistaken he also labeled previous iTulip 'correct calls', so it was a very strong implication he was saying 'this too is an iTulip call'. I wish I could find this.... does anyone remember which article this was?

Edit: OK, I finally found it. Scroll down and you'll see the charts I'm talking about. Does this look like EJ is "calling" the second and last chance to short the China market or not? I mean, that is EXACTLY what it says, and he even writes it in quotes to compare it to previous good calls. In the paragraph below the charts he writes "The way I see it, now is the second and last chance to short China’s stock markets." Am I nuts or am I seeing what's really there? How can he then say he's surprised anyone would think he was saying it's time to short China, as he wrote more recently? http://www.itulip.com/forums/showthr...290#post114290

[we_are_toast]

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

Is what's happening really disinflationary? It's true that the Europeans are cutting their spending, but only because they have been forced to - not because their economies have recovered.

Exactly! The Europeans are being forced to cut their spending, the IMF put Japan on notice to cut their deficits, and the U.S. not only has no stomach for stimulus, after the election and after the deficit commission reports in Dec., the U.S. will start to cut back it's deficit spending. Recent reports out of China say that they are slamming on the breaks and housing prices are starting to fall.

TPC: The world banks are flooding the balance sheets and cash flows of the "chosen ones", the dominant banks, while they and their government minions tread water with the "economy for the rest of us".

A big question I have is, is this working, or is it going to work? You can flood the banks with all the reserves you want, but if there is no demand to borrow money and expand your business (and I don't believe there is), then this isn't going to help reinflate the economy.

I fully agree "It's only spasmodically disinflationary or deflationary now", but what I'm having a problem with lately is how big this spasm is going to be, and how long the "now" is going to last.

I really wish EJ, FRED, or someone could explain where the inflationary forces are going to come from, in light of the massive demand destruction from governments around the world. EJ believed there would be multiple stimuluses, and I agreed, but now it looks like it was not only a one shot deal, the reverse is happening and instead of stimulus we're going to get world wide government contraction.

[jiimbergin]

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

Jim, I'm referring to a chart in an article that appeared somewhere in mid 2009. I'm trying to find it but I have to say I find the organization of this website very confusing and I haven't been able to re-locate it as of yet- perhaps someone else would be so kind to give a 'pointer' to that article? Anyway, it was a chart of where the China markets had rebounded to at that point. He circled the point on the chart and labeled it in bold 'second and last chance to short China" or words very close to that and identical in meaning. If I'm not mistaken he also labeled previous iTulip 'correct calls', so it was a very strong implication he was saying 'this too is an iTulip call'. I wish I could find this.... does anyone remember which article this was?

Edit: OK, I finally found it. Scroll down and you'll see the charts I'm talking about. Does this look like EJ is "calling" the second and last chance to short the China market or not? I mean, that is EXACTLY what it says, and he even writes it in quotes to compare it to previous good calls. In the paragraph below the charts he writes "The way I see it, now is the second and last chance to short China’s stock markets." Am I nuts or am I seeing what's really there? How can he then say he's surprised anyone would think he was saying it's time to short China, as he wrote more recently? http://www.itulip.com/forums/showthr...290#post114290

That is what it says. Again I went by the summary at the very end when he suggests this is only for a "adventurous gambler to short it", which I did. But he should have been and should always be clearer than he is about his calls.

[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

At 10:30 Eastern time both are well below Russell's criteria.

DJI 10,142
DJT 4,192

Many hours left in the trading day, they may recover above like they did yesterday.

[pianodoctor]

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

That is what it says. Again I went by the summary at the very end when he suggests this is only for a "adventurous gambler to short it", which I did. But he should have been and should always be clearer than he is about his calls.

EJ has recently written that when he is saying 'it's time to short' he will really make that clear. I thought it was clear before. But I'm not mad about the China call. I didn't take out shorts, I simply took it as a cue to finally get out of my positions (which were significantly down since purchase), and for all I know it was simply a 9 months too early call. I may be quite glad I did before this year is over. Also I am an adult and realize no matter how good he is, he doesn't have a crystal ball. However I did take out a small short position on the S&P based on EJ calling the U.S. rally over in late '09 because at that point, EJ's track record on calls still looked fairly bulletproof. I suspect I'll recoup that yet at some point. In any case it wasn't a huge bet. But I still would like FRED to clarify on my earlier question regarding his statement about iTulip calling "Late April 2010 we gave in The Next Crash the straggling stragglers a chance to hang on to 60% of March 2000 S&P500 purchasing power". Because I didn't originally read that article as a call. So we've gone from a claim that really specific calls should not have been taken as calls to a statement that something more nebulous was a call. I would definitely like more clarity.

[metalman]

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

EJ has recently written that when he is saying 'it's time to short' he will really make that clear. I thought it was clear before. But I'm not mad about the China call. I didn't take out shorts, I simply took it as a cue to finally get out of my positions (which were significantly down since purchase), and for all I know it was simply a 9 months too early call. I may be quite glad I did before this year is over. Also I am an adult and realize no matter how good he is, he doesn't have a crystal ball. However I did take out a small short position on the S&P based on EJ calling the U.S. rally over in late '09 because at that point, EJ's track record on calls still looked fairly bulletproof. I suspect I'll recoup that yet at some point. In any case it wasn't a huge bet. But I still would like FRED to clarify on my earlier question regarding his statement about iTulip calling "Late April 2010 we gave in The Next Crash the straggling stragglers a chance to hang on to 60% of March 2000 S&P500 purchasing power". Because I didn't originally read that article as a call. So we've gone from a claim that really specific calls should not have been taken as calls to a statement that something more nebulous was a call. I would definitely like more clarity.

can't speak for freddie but if you read the comments in 'the next crash' many folks beat ej up for not encouraging them back into the market in march when he talked about a 'first bounce'. 3 wks later... no moe complaints! anyone now... today... really feel like they missed out?

anyhow... you're not even supposed to be in stocks if you got a 30% gold/70% treasury portfolio... so who cares if it's crashing. i don't give a shit... been out since 2000.

gold is off 5% from the peak but still up 5% for the year... in jan. ej forecast gold up 4% for the year.

how about t bonds?



gold down/bonds up.

that's why we got a gold/bonds portfolio. the 'first bounce' editorial is re speculation not wealth preservation.

[pianodoctor]

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

I agree with much of what you say. Though I don't beat up EJ. I'm just trying to get iTulip to be more clear. My problem is I came to iTulip too late. Being quite unsophisticated, I was first sold on the Schiff concept before discovering iTulip. Ironically it was Schiff that pointed me to iTulip. Double ironically it was Schiff's (Mr Gold himself) own rep that was very resistant to me taking a healthy gold position originally in '07, if you can believe that sh*t. That still pisses me off. I am trying to achieve the gold/bonds port, but have been attempting to back out of stocks opportunistically without losing too much. Perhaps that was a mistake. But I have a lot more gold and cash than I used to have, at least.

[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

Richard Russell’s criteria for a major market crash have been satisfied.
At close today, the indices were:

DJI 10,067
DJT 4,163

We now have an objectively measurable test we can all perform at home.
Print out the original Richard Russell article and stick it to your refrigerator with a magnet. From time to time review it, and see if his prediction comes true. Throw it away when he is proven wrong, and know he blew a big one.

I have heard two very reasonable hypotheses about why RR may be wrong this time.
The first is that he is 86 years old and may no longer be in top form.
The second (from Fred on a thread in Trader’s Corner today) is that the market is not the same as it was when RR made his bones –the Fed now intervenes big and intervenes often.

Whatever. He made a crystal clear call, and we can all now watch to see if it comes true.

[lsa420]

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

I really wish EJ, FRED, or someone could explain where the inflationary forces are going to come from, in light of the massive demand destruction from governments around the world. EJ believed there would be multiple stimuluses, and I agreed, but now it looks like it was not only a one shot deal, the reverse is happening and instead of stimulus we're going to get world wide government contraction.

I hope you are right. That is the best thing that could happen. And if it does, I will officially believe in (G)od.

[EJ]

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

Exactly! The Europeans are being forced to cut their spending, the IMF put Japan on notice to cut their deficits, and the U.S. not only has no stomach for stimulus, after the election and after the deficit commission reports in Dec., the U.S. will start to cut back it's deficit spending. Recent reports out of China say that they are slamming on the breaks and housing prices are starting to fall.



A big question I have is, is this working, or is it going to work? You can flood the banks with all the reserves you want, but if there is no demand to borrow money and expand your business (and I don't believe there is), then this isn't going to help reinflate the economy.

I fully agree "It's only spasmodically disinflationary or deflationary now", but what I'm having a problem with lately is how big this spasm is going to be, and how long the "now" is going to last.

I really wish EJ, FRED, or someone could explain where the inflationary forces are going to come from, in light of the massive demand destruction from governments around the world. EJ believed there would be multiple stimuluses, and I agreed, but now it looks like it was not only a one shot deal, the reverse is happening and instead of stimulus we're going to get world wide government contraction.

Deflation has been forecast repeatedly since we opened shop in 1998, and disproved, yet it keeps coming up. We've run out of ways to explain it again. No one seems to understand the concept of double entry bookkeeping, and it's hard to teach without causing eyes to glaze over. What to do? Obviously the results of our analysis over the past 12 years is insufficient. We have to keep re-proving it over and over. Columbus was not asked to keep circling the world over and over to prove that the discovery of a round earth was not a fluke. We've proved deflation a false worry twice in 12 years, but apparently to no avail. It's as if we are starting over again each time.

[harset]

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

Deflation has been forecast repeatedly since we opened shop in 1998, and disproved, yet it keeps coming up. We've run out of ways to explain it again. No one seems to understand the concept of double entry bookkeeping, and it's hard to teach without causing eyes to glaze over. What to do? Obviously the results of our analysis over the past 12 years is insufficient. We have to keep re-proving it over and over. Columbus was not asked to keep circling the world over and over to prove that the discovery of a round earth was not a fluke. We've proved deflation a false worry twice in 12 years, but apparently to no avail. It's as if we are starting over again each time.

EJ you were working on a new article about inflation/deflation as Fred mentioned somtime back........when its going to be released......