What? You’re not happy with the market? It could be worse. You could have loaded up on the Facebook IPO at 44, and today the dog is selling at 19.07. But I’m not sure I feel sorry for Zuckerberg. After all (sniff) he’s no longer one of the five richest tech-lords. Now there is talk that he should be removed as CEO, because he’s too immature.
Fred Hickey, my vote as the top expert in tech, thinks the tech bubble has popped, and that tech is now in a secular bear market. I agree with him, only because I can’t really work my iPhone (I claim it’s not really user-friendly), and because I think playing with Facebook is a royal pain.
Hickey, by the way, is a huge fan of gold and the gold mining stocks. But don’t get me wrong about tech, I love Amazon and Google, and I love the Internet. I think the Net has changed the world. It allows almost everyone on earth to know what’s going on in the rest of the world, and we know that “the truth will set you free.” Every dictator loathes and fears the Internet, because the Net allows people to know what’s going on. Why even North Korea is showing signs of crumbling, not only because of the Internet — but because their newest boy dictator was educated in Switzerland.
Yesterday, the Dow almost made it to its May 1st peak, but at the close they sold the Dow off. The Transports still have a way to go before they can close above 5285.97. What will I do if both D-J Averages do close above their May peaks? In that case, the facts will have changed, and I’ll change with them. There’s nothing stupider in this business than an analyst who dreams up a scenario and who sticks with his scenario no matter what. I often have a scenario, and as long as the markets go in harmony with my scenario, I’ll stick with it, but when the facts change I revise or jettison my scenario — to do otherwise would be idiotic.
I may appear fussy in my insistence that the two D-J Averages close above their May peaks, but whether they do or do not could be unbelievably important.
….read mor from 84 Year Old Richard Russell HERE
The following is an excerpt from Richard Russell’s Dow Theory Letters
Two days ago, amid all the low volume and sluggishness, the Transports gave us just a hint of something hopeful. It was a breakout of the declining trendline, as you can see on the chart. The Transports have been the laggers all year, and it seemed as though if the Industrials closed above their May peak, the Transports would not confirm. Now with this little upside breakout, the Transports are giving us a ray of hope. Maybe, just maybe, the Transports will add on a few more point, and get in the game.