Two of the Best on Life Markets & Gold

Posted by Richard Russell - Comment by Mark Leibovit

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Gold ended weaker on Thursday, hurt by a strong dollar. Spot gold fell 8.30 to 1741.60. 

While volume is negative, both gold and silver have managed so far this week to hold lows posted on Monday – 1727.50 in gold and 32.46 in silver. A ‘seasonal’ low is due by the end of the month. Silver declined from 35.32 (September 21 high) to 32.46. 

Sprott Asset Management’s John Embry tells King World News tonight that all markets are being rigged, gold most of all, in advance of the U.S. presidential election but that demand for real metal has put a floor under the price and he expects a big move up after the election. An excerpt from the interview is posted at the King World News blog HERE

Do you subscribe to the Leibovit VR Gold Letter? I hope so. Here is the link: The October 12 edition was sent to subscribers Friday morning. New subscribers receive a 50% discount during the first month.

88 yr old Richard Russell on Gold, the Fed, Market Timing, Google & Apple

Yesterday, the Dow ended the day with a feeble 5 point gain.  But the Transports were up 29 points at the close.  The high for the Dow on this advance was 13,596.93.  To confirm that high the Transports would have to close above 5315.97.  Can they both rally to new highs?  Ah, if we only knew. 

And I ask myself, if I had taken a big position in the DIAs, what would I be doing now?  The answer — I guess I’d sit it out and hope that the two Averages had the oomph to break out to new highs. 

But what if the market were to reverse and head down?  In that case I’d clear out my position and call it a day.

So the answer to the whole caboodle is that I wouldn’t have had the nerve to load up on DIAs in a big way in the first place.  And with a small speculative position, I wouldn’t have garnered enough paper profits to be worth the stress.

So where does the whole thing leave us?  I guess it leaves us sitting on our hands and watching the show.  It boils down to a case of exquisite timing.  And that’s not what I want my subscribers to get into.

So to wind it up, I’m hoping that the two Averages break out to new highs, and the market turns all out bullish.  This would be good for the country — at least for a while.  But don’t kid yourself, this market is, and has been, powered by Ben Bernanke and his merry men at the Fed.

In the end, I don’t think Bernanke is doing us any lasting favors.  Nor do I think the institution of the Federal Reserve is doing us any favors.  My kids and your kids and grandkids will curse the day when the Federal Reserve was secretly made master of the US monetary system.

It’s a crying shame that we have only one way to protect ourselves from the predations of the Fed.  That way is to own real money — gold.  If they could have their way, the Fed would outlaw gold.  From the Fed’s own standpoint, they have already done the next best thing — that is to subject gold to shameful taxes.  As the ancient Chinese sage said, “This too shall pass.” 

My October 15 warning about Google (below) proved to be correct.  Google crashed 10% today and took the major stock averages with it.  On the October 15 site, I also warned about Apple, which got whacked hard today.



An interesting note: US investors have pulled $138 billion from ETFs and mutual funds (all of which invest in stocks) since March, 2009.  Thus, it is probable that retail (small) investors are not the ones who have been driving the stock market higher.  

To take the other side of the coin, I believe it’s the hedge funds and traders who have been driving the Dow higher.  This rally has been a godsend for the fund managers, who have had a hard time showing any profits this year. 

Late Notes — December gold was down 8.30 to 1744.70, and still holding above 1700.  The gold shorts must be getting weary.

Gold has declined from 1796.70(October 4 high) to 1727.50 and corrective potential is still to 1703 and possibly 1676 and 1642.

But taking a bigger picture view, if you don’t own the precious metals, anytime is a good time to buy them. The expression goes: ‘Don’t wait to buy gold – buy gold and wait’! Dollar-cost averaging (a fixed amount of investment in at pre-scheduled times) is a highly recommended strategy when it comes to the physical metals.

To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE. 

Russell also offers 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).

Richard Russell publishes a detailed Daily comment, the latest Primary Trend Index (PTI) figure for the day will be posted on his 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.if you subscribe to his Letter that is published and mailed every three weeks. To subscribe go HERE

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)

The Perfect Business