R. Russell: “Gold is looking increasingly interesting”

Posted by Richard Russell - Dow Theory Letters

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With Gold & Silver up sharply this morning, it might pay to look at what the GodFather of Financial writers the 89 year old Richard Russell had to say 5 days ago – Ed


Richard Russell: “The chart below almost speaks for itself.  Spot gold is in a rising trend and is touching its 50-day MA.  The nearby target is to climb above 1700.  There has been terrific resistance to gold’s rise — it’s as if every penny higher has been fought against by the anti-gold group (and who could that be but the Fed?).  RSI and MACD are both bullish:.

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“GDX has been a lagger, both in the general market and a laggard vs. gold.  I think this ETF (holding the larger gold mining shares) would be a good item to put in your portfolio and forget about.  The gold mining stocks have big leverage to gold — if or when gold finally takes off”.

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“GDXJ is the ETF containing the speculative smaller gold mining stocks.  My advice, take a small position in GDXJ and forget about it for a while.  MACD is bullish.  I think it could be a surprisingly good long-term holding.  But for GDX and GDXJ you are going to need patience”

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Getting back to the general market, the Transports are surging into record high territory.  All that’s needed now is a confirmation by the Industrials.  The Dow closed yesterday at 13,712.13 just 452 points below their record high of 14,164.53 established in 2007.  Below we see the Dow, climbing up a steep trendline.  

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“The public is bullish.  The retail investors are the most bullish they’ve been in four years.  Volume implications and MACD are bullish.  RSI is about to enter overbought area.  So shouldn’t the Dow climb to new record highs?  Sure, so what’s stopping it?  Just that old axiom, “The best laid plans of mice and men” — Then we have Russell’s axiom — There’s only two sure things in the market — surprise and uncertainty!”


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About Richard Russell

Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.

Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Through Barron’s and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974.

The Letters, published every three weeks, cover the US stock market, foreign markets, bonds, precious metals, commodities, economics –plus Russell’s widely-followed comments and observations and stock market philosophy.