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"It's fun to be able, for once, to place yourself on the cheerleaders' side of the U.S....

"It's fun to be able, for once, to place yourself on the cheerleaders' side of the U.S. markets," writes Richard Russell, advising his readers to buy the DJIA ETF (DIA). "It makes sense to be on the side of the (Fed)." Russell last week: I've never seen anything like this.
Comments (25)
  • About 200 S & P points too late.... Come to the dance now with new $ and you will be looking for a chair when the music stops...

     

    There will be plenty of opportunities to buy this market down the road....
    12 Mar 2013, 11:11 AM Reply Like
  • Bears throwing in towels baby...
    Hey, I'm a permabear & I'm thinking of throwing in the towel... which gets me thinking I should stick to being a bear...

     

    ha ha
    12 Mar 2013, 11:18 AM Reply Like
  • We are greedy when others are fearful and we are fearful when others are greedy, paraphrasing Warren Buffet.
    13 Mar 2013, 04:46 AM Reply Like
  • "It makes sense to be on the side of the (Fed)."

     

    Seriously? You're just now coming to this realization?
    12 Mar 2013, 11:19 AM Reply Like
  • Her is the SAME guy in May of 2010 when the DOW was at 8100:

     

    Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

     

    Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.
    12 Mar 2013, 11:24 AM Reply Like
  • Buy high, sell low. Gotta have a gameplan...
    12 Mar 2013, 12:17 PM Reply Like
  • wow. if this is not a shot across the bull bow.
    12 Mar 2013, 12:27 PM Reply Like
  • I've been in cash (cept for small APA position) for almost a month now............and I'm the dumb money??
    12 Mar 2013, 12:30 PM Reply Like
  • Shorting dollar and buying commodities here instead of buying stocks. If this rally is real, inflation will kick in. If not, I plan on reapplying equity shorts as I still think we have 40% downside here.
    12 Mar 2013, 01:20 PM Reply Like
  • Inflation might not kick in for a while in a ZIRP environment.
    12 Mar 2013, 09:49 PM Reply Like
  • Where do you come up with a 40% downside?
    13 Mar 2013, 04:48 AM Reply Like
  • Dangerous buying at all time highs. DIA is overbought right now. Not the time to go long, imo. Wait for a dip, then go long with stops, or be ready to short it if the economy takes a dive.

     

    It's definitely trending upward, though. 16% gain since mid November.
    12 Mar 2013, 02:43 PM Reply Like
  • What is the "real" all time high? Adjusted for dollar destruction...
    12 Mar 2013, 03:17 PM Reply Like
  • This admitted psycho nut has been wrong for five years straight. Do the opposite of what he recommends. He's on death's doorstep and this maybe his deathwish--for others to follow him and lose.
    12 Mar 2013, 05:10 PM Reply Like
  • You can't say we're in a Dow Theory bull market and then give explanations why you don't believe it without using a Dow Theory reasons, as Russell did in last weeks pronouncement of disbelief.

     

    There is a massively legitimate reason for being unconvinced about the signals given by Dow Theory about being in a bull market.

     

    I'm suprised that Russell didn't make the case for it. After all, Dow Theory is supposed to be an all inclusive indication that doesn't rely on single points of data like QE infinity, unemployment, or MZM...it is already in the price of the market.

     

    Sadly, Dow Theory is misunderstood when it is said that it gives a "buy" or "sell" signal. Never has Dow, Hamilton or Rhea indicated that the theory suggest buy or sell. Instead, it only indicates what the general direction of the market MIGHT be 3-9 months down the road.

     

    Unfortunately, money is lost in the the mistaken belief that an investor should be 100% in the market when there is a bull market indication and 100% out of the market when there is a bear market indication.

     

    Regards.
    12 Mar 2013, 05:53 PM Reply Like
  • The worst investment ever: paying for Richard Russell's newsletter.
    12 Mar 2013, 06:08 PM Reply Like
  • Richard Russell turning bullish can't possibly be good for bulls.
    12 Mar 2013, 10:31 PM Reply Like
  • Great! Russel's call is a good short term DJIA's top signal.

     

    Precious metals offer better risk/return odds at this time.

     

    Best,
    Dom
    12 Mar 2013, 10:32 PM Reply Like
  • Hi Dom,

     

    If it is a DJIA top, then PM's get smacked like nobody's bizness.

     

    Regards.
    13 Mar 2013, 01:16 AM Reply Like
  • Hi New Long Observer,

     

    Can you please explain a little more?

     

    We had an outrageous amount of money flowing out of GLD and IAU recently while the big speculators were turning long on the comex.

     

    Now that we have the DJIA new highs stories all over the place tells me that we may be due for a breather while precious metals are due for a big (short term) rally at the very least. If that rally fails, I would take it as a strong bear case for the PMs.

     

    What do you think?

     

    Cheers!
    Dom
    13 Mar 2013, 01:29 PM Reply Like
  • Hi Dom,

     

    Below is the data that we're drawing our conclusions from.

     

    When the Dow has declined -10% or more, the price of gold and gold stocks have typically had even greater declines.

     

    Going back to the gold bull market of the 1970's, gold and the Dow had the following "coincidences":

     

    8/12/1975
    Dow down -11.59% v. Gold down -25.49%

     

    11/10/1976
    Dow down -10.55% v. Gold up +25.67%

     

    3/1/1978
    Dow down -26.88% v. Gold up +51.21%

     

    11/14/1978
    Dow down -15.06% v. Gold down -23.33%

     

    11/8/1979
    Dow down -12.49% v. Gold down -17.88%

     

    3/27/1980
    Dow down -20.49% v. Gold down -48.10%

     

    12/11/1980
    Dow down -11.38% v. Gold down -16.09%

     

    3/9/1982
    Dow down -23.15% v. Gold down -37.47%

     

    8/9/1982
    Dow down -12.15% v. Gold down -21.19%

     

    7/25/1984
    Dow down -16.70% v. Gold down -19.02%

     

    Switching to the XAU Index, where the declines are more pronounced and consistent, we have the following data:

     

    9/29/1986
    Dow down -10.36% v. XAU down -15.06%

     

    4/27/1987
    Dow down -10.20% v. XAU down -28.12%

     

    10/20/1987
    Dow down -40.35% v. XAU down -46.54%

     

    10/16/1989
    Dow down -11.08% v. XAU down -10.27%

     

    1/30/1990
    Dow down -11.30% v. XAU down -29.27%

     

    10/11/1990
    Dow down -22.48% v. XAU down -37.89%

     

    4/4/1994
    Dow down -10.87% v. XAU down -27.66%

     

    7/16/1996
    Dow down -10.57% v. XAU down -23.60%

     

    4/14/1997
    Dow down -10.61% v. XAU down -25.97%

     

    10/28/1997
    Dow down -15.94% v. XAU down -43.15%

     

    9/1/1998
    Dow down -20.99% v. XAU down -47.97%

     

    10/18/2000
    Dow down -15.31% v. XAU down -24.35%

     

    3/22/2001
    Dow down -17.47% v. XAU down -19.80%

     

    5/21/2001
    Dow down -24.11% v. XAU down -24.82%

     

    3/19/2002
    Dow down -26.80% v. XAU down -37.13%

     

    8/22/2002
    Dow down -19.52% v. XAU down -21.91%

     

    11/27/2002
    Dow down -15.27% v. XAU down -24.32%

     

    10/9/2007
    Dow down -42.28% v. XAU down -62.11%

     

    This data is consistent in both gold bull markets and gold bear markets, as reflected in the period from 1975 to the present.

     

    In the course of the years that we've been posting this information on Seeking Alpha, we have had many legitimate claims that the data has been cherry picked. For anyone who makes this claim then they are correct. However, as gold investors, we cherry pick data that paints the worst case scenario so that we're properly prepared for the inevitable declines before we put any money on table. Our primary concern is avoiding losses whenever possible (not an easy task).

     

    We hope this data brings clarity to our rationale and perspective.

     

    Best regards.
    13 Mar 2013, 02:45 PM Reply Like
  • Thanks for the info, it is much appreciated!

     

    Best,
    Dom
    13 Mar 2013, 10:14 PM Reply Like
  • it's different this time
    13 Mar 2013, 05:34 AM Reply Like
  • A detailed explanation of why Dow Theory isn't signaling a new secular bull market can be found at our site (found here: http://bit.ly/XaB5Gk).

     

    Those not wishing to leave Seeking Alpha can find the introduction to the same article at our SA instablog (found here: http://seekingalpha.co...).

     

    Regard.
    15 Mar 2013, 01:23 AM Reply Like
  • John Q.Public left the building in 2009 , and hasn't been seen since..

     

    Thoughts to ponder for non- believers, and the more of those we have just makes the case a bit stronger...

     

    Best of luck in your investments...
    15 Mar 2013, 09:47 PM Reply Like
DJIA (DIA) S&P 500 (SPY)