“The trend continues bullish. This is confirmed by the DIAs (chart below) breaking out to the upside. Remember, use a price of 154 as your safety level. If the DIAs drop blow 154, sell them and take a small profit. Note that the RSI is almost overbought, and the histograms are trending lower. (Ed Note: Richard Russell has been writing about markets since starting one of the first Market Newsletters shortly after returning from his job as a B-25 Bombardier over Europe during WW11. He is almost 90 years old now, remains fascinated by the markets, and expresses that by writing to his subscribers every trading day.)
I’m pleased to include the chart below of GLD. Here we see gold climbing above its 50-day MA, and at the same time rising above its trendline. RSI and MACD are both positive, suggesting that the base that has been building in gold is now complete.
The P&F chart shows GLD climbing to the 130 box and perhaps needing a bit of consolidation. Therefore, it would not surprise me to see gold down a bit today.” (Richard’s comments were written in the morning after which gold was hit hard) “Of course, a rally to the 144 box would be extremely bullish, and would point to much higher-priced gold.
For the last month or so, we have been bombarded with every kind of story, opinion and rumor (most of them negative) about gold and gold mining stocks. Already, gold has rallied past the point where those who had sold their gold were ready to reenter. So much for trading in and out in a bull market.”
The Master continues: “Price action — Yesterday the Transports closed down, which bothered me. Today, Transports were down during the day, and the Dow was down with them. The big question in my mind is how weak are the Industrials? The daily chart below gives us a clue. I’m using the 50-day MA of the Dow as the dividing line. As long as the Dow holds above 15,400, I’ll grade the Dow was bullish. But if the Dow falls below 15,400, I’ll refer to the 50-day MA, which stands at 15,209.
If the Dow falls below 15,000, I’ll be looking for trouble. The big question that I’m asking is as follows — is the Dow still in its primary bull trend, or is there a change? Again, I’ll remind my subscribers, never mind the opinions and the rumors, we’re dealing with price, and price takes everything into consideration.”
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To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE. Ed Note: I just spoke with Richard’s head office recently I am told that Richard still wakes up every morning excited to see what is going on in the markets. That is why his production of writing for his customers is so prolific. Not only does he mail out his extensive Newsletter every 3 weeks, but he sends out a comment every day with his thoughts on the market action that day. All this for .82 cents a day, or only $300 per year!
