Stocks – An important day

Posted by Richard Russell - Dow Theory Letters

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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. Amongst his achievements Richard was in cash before the 2008/2009 Crash and he has been Bullish Gold since below $300.


Late Notes — A mild rising day. But wait, it was better than that. The Dow and the Transports BOTH rose to new highs for the move. This is almost a guarantee of higher prices. And it’s a reconfirmation that the secondary trend of the market is bullish.

(for an explanation of the Dow Theory go HERE.)




Ed Note: Below from Don Vialoux’s Monday technical analysis of the Dow Industrials and Dow Transportation average in which he agree’s with Russells view of higher US Stock prices:

“The Dow Jones Industrial Average improved 82.60 points (0.79%) last week despite strength in the U.S. Dollar. Intermediate trend remains up. Its 50 day moving average currently at 10,109.46 has proven to be a reliable intermediate support level. Short term momentum indicators recently slipped to a neutral level. Support also is indicated at 9,678.95. Strength relative to the S&P 500 Index remains positive. Seasonal influences currently are positive.”


“The Dow Jones Transportation Average slipped 7.94 points (0.19%) last week. Intermediate trend is up. The Average remains above its 50 and 200 day moving averages. Short term momentum indictors are overbought, but have yet to show signs of rolling over. Strength relative to the S&P 500 Index remains neutral. Support is indicated at 3,546.48.



Ed Note: Don’s Bottom Line: ‘Tis the season for equity markets to move higher until early January! Look for history to repeat.

Back to Russell:

“Gold Thoughts — Buying and accumulating gold must be seen as a LONG-TERM proposition. I can tell you that gold is going much higher, but I can’t tell you when. I can tell you what to buy — gold bullion coins — but I can’t tell you when it’s going to go into its bubble phase. By the same token, I can tell you that the dollar will go into its “water fall phase,” but I can’t tell you when.

Don’t buy gold to “make a killing.” Buy gold as a permanent store of wealth, and one that can’t go bankrupt. Rich people understand that.

Bull markets eventually come to a boil, but the time of the boiling is never obvious. Apply that thinking to the gold bull market.

China is now the leading gold miner and producer in the world. China is actively encouraging its people to buy and accumulate gold. And I wonder how long it will be before the US government imitates China. Yes, I foresee the time when the US government (as stupid as it’s been, so far) will do a reverse and encourage the American people to buy and accumulate gold.

China, Russia and most of the Asian central banks still have only a small percentage of their reserves in gold. All of these nations want to increase the gold percentage of their reserves. There was an announcement over the weekend that the Russian central bank was adding to its gold reserves.”

Daily Gold Chart



Weekly Gold Chart




Monthly Gold Chart




The 84 yr. old writes a market comment daily since the internet age began. In recent years, he began strongly advocated buying gold coins in the late 1990’s below $300. His position before the recent crash was cash and gold. There is little in markets he has not seen. Mr. 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. 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.