Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

[ThePythonicCow]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Thanks, charliebrown. That makes more sense.

My guess would be the corp bonds are strung out between the corp E/P you describe and Treasuries. Treasuries have been crammed down by some heavy handed monetizing. By this theory, when Treasuries start to go up, corp bonds will rise as well.

But my guess is worth less than the 20 seconds you just spent reading it ... sorry ;).

[DRumsfeld2000]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Thanks also, charliebrown.

Very interesting. I think that caution is warranted.

[WDCRob]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

History repeats. First there is the bubble, then the crash, then the reflation, then the political backlash, so far all according to the process that we put forward to readers three years ago. The problem from an investing standpoint is that after the first year of a debt deflation, monetary and fiscal policy become politicized.

To the point above... you see Obama and Summers beating the drums today for a second stimulus package. Will it pass? Who knows? But whether it passes or not would potentially influence what comes next pretty dramatically.

One scenario... Congressional Republicans and Tea-Party-fearing Democrats vote to restrict new stimulus/spending. Unemployment spikes, housing and stocks crash. Then Republicans join Democrats in a MAJOR new spending bill after the mid-term elections. Things muddle along through 2012 when Obama wins by campaigning against Wall Street. Massive new spending in his second term. Poom.

Just a guess.

[thriftyandboringinohio]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Richard Russell’s criteria for a major market crash have been satisfied.
At close today, the indices were:

DJI 10,067
DJT 4,163

We now have an objectively measurable test we can all perform at home.
Print out the original Richard Russell article and stick it to your refrigerator with a magnet. From time to time review it, and see if his prediction comes true. Throw it away when he is proven wrong, and know he blew a big one.

I have heard two very reasonable hypotheses about why RR may be wrong this time.
The first is that he is 86 years old and may no longer be in top form.
The second (from Fred on a thread in Trader’s Corner today) is that the market is not the same as it was when RR made his bones –the Fed now intervenes big and intervenes often.

Whatever. He made a crystal clear call, and we can all now watch to see if it comes true.

Well, I stuck it on my refrigerator with a magnet.
The year has ended.
The venerable Mr. Russell got it wrong.

[Master Shake]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Kudos for not letting this slip down the memory hole.

[pianodoctor]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

I just read an article about (I'm paraphrasing) 9 reasons the commodities rally can't possibly hold up any longer. Each was a perfectly good, rational, convincing reason and the overall feeling you come away with was that the rally just can't possibly hold up a minute longer.

But sometimes I think for all the rational, logical reasons that can be given that the market should or should not do a certain thing, perhaps the most important and overriding factor is the one thing that is never mentioned: The Financial Sector-Media Complex is really good at what they do.

[cpnscarlet]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

I just read an article about (I'm paraphrasing) 9 reasons the commodities rally can't possibly hold up any longer...

Thanks also for pointing this out. I remeber first reading this article and it was chilling. And yes, wrong. It looks like Sinclair's 1650 gold won't happen either...on time. But nobody knows what the next 30 minutes will bring, and I have done quite well turning my back on fools with their fiat money and holding close to true money. Other commodities have treated me well too.

Let's look to Congress and see if their actions increase the MOPE so that things go on as usual. That's the best I can see, since real solutions to our current fiscal problems are no where to be found.

I also believe that since we (the US) decided to put a COMSYMP in the White House, a righteous and terrible punishment is being played out and we have many more thrashes to take.

[nero3]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

So far his gold forecast have held well, however it's not long before gold will trade below the 200 day moving average relative to the S&P 500, indicating that gold is in a very bad trend. If thats the case, he is not only wrong about the stock market, but also about gold. Unless it comes a huge correction in the stock market now (let's say he just failed to predict QE2), and gold shoot up, I think it's only a matter of time before gold will trend down in nominal terms.

[rabot10]

Re: Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

"This is the most specific and drastic call yet, a "double down" on previous incorrect calls."

Any more to say on incorrect calls?