Posted by Richard Russell with Comment by Dennis Gartman

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Richard Russell has made his subscribers fortunes. One of the best values anywhere in the financial world at only a $300 subscription to get his DAILY report for a year. HERE to subscribe. Richard  has been Bullish Gold since below $300. He also loaded up on bonds in the early 80’s when US Treasuries where yielding 18%+. A 30 year bonds through compound interest would turn $1,000 into $300,000 at maturity. (include reinvestment of interest income, which Richard does as his view is compounding interest is the ROYAL ROAD to RICHES)


“as of Wednesday, gold had been up 20 of the last 22 sessions, and I wondered on the site how long this atypical performance could continue. Last night gave me a hint — the Feb. gold futures were down 14.0 at 6:29 PM. So I guessed it was time for some kind of gold correction — how big I had no way of knowing.

As of yesterday, the decline didn’t even show on a 10-point, three-box reversal chart. On this chart each box represents ten points in gold, and only rallies or declines of three boxes or more are depicted on the chart. Today the decline stretched to over 40 points, and this indeed shows on a P&F.”


GLD, the gold exchange fund provides us with a clearer picture. Here we see GLD up on a “high pole” and clearly extended. A correction back to 106 to 108 would be healthy. Actually, any correction that ended at or above the halfway level would be healthful. So a test is on. I await the verdict of the market. “



This brief initial comment  from the Legendary Trader Dennis GartmanFor subscription information for the 5 page plus Daily Gartman Letter L.C. contact – Tel: 757 238 9346 Fax: 757 238 9546 or HERE to subscribe at his website.

Let’s begin by stating very clearly that the bull market in gold has not ended. Friday’s weakness was not the end but simply a fact of higher prices and larger public participation giving way to larger movements and greater swift liquidation that these high prices demand. Simply put, a 2% price change on $1200/ounce gold is far larger than is a 2% price change on $600/ounce gold. Everyone knows that, of course, but during the heat of battle that is all-too-often forgotten.  In Sterling, or EUR or Yen terms, all gold did on Friday was move 2% lower. In the great scheme of things that it nothing of consequence but in the heat of battle, the 4-5% price movement for gold in US dollar terms was jaw- dropping and panic laden.


At the bottom left of p.1 this morning we’ve a chart of gold in Sterling terms.  The trend is rather clear: it is moving still from the lower left to the upper right. Yes, at or near £750 prices were a bit over-extended, but now that gold has fallen back toward €700 [Ed. Note: To be precise, it is trading £698.80 as we write.] that over-extendedness has been nullified and the price has returned to more reasonable levels.