Stock Market Guru: Sell Everything!

Richard Russell, the Wall Street veteran and the man behind the Dow Theory Letters, has a pretty strong message to his fellow stock market investors in this weeks newsletter. It quite simple; get out of stocks! and into cash or gold. According to 85 year old analyst, a major crash is underway.

“Clearly something is wrong.”

Richard Russell


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.

That’s the main message from Richard Russell in today’s edition of the Dow Theory Letter.

Here’s a bit more – the full post can found at: businessinsider.com

And I ask myself, “Am I seeing things? The April 26 high for the Dow was 11205.03. The Dow is selling as write at 10557 down 648 points from its April high. If business is even better than expected, then why is the Dow down over 600 points? And why, if there were 674 new highs on the NYSE on April 26, were there only 20 new highs on Friday, May 14? And if my PTI was 6133 on April 26, why is it down 17 points since its April high?

The fact is that I’ve been seeing deterioration in the stock market ever since early-April, and this in the face of improving business news. The D-J Industrial Average is composed of 30 internationally known top-quality blue-chip stocks. These are 30 of “America‘s biggest companies.” If Barron’s is so bullish on the future of America’s biggest companies, then why isn’t the Dow advancing to new highs?

Clearly something is wrong. But what could it be? Much as I love Barron’s, I trust the stock market more. If I read the stock market correctly, it’s telling me that there is a surprise ahead. And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.

Just as for years I asked, cajoled, insisted, threatened, demanded, that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (including C and BYD, but not including golds) and get into cash or gold (bullion if possible). If the two Averages violate their May 7 lows, I see a major crash as the outcome. Pul – leeze, get out of stocks now, and I don’t give a damn whether you have paper losses or paper profits!

The Survivor

85 year old Russell has spent 50 years writing about the twists and turns of the stock market, staying true to the basic theories of Wall Street’s original analysts while adapting to technology and the expanding economic world.

His “Dow Theory Letters,” writings that contain his thoughts on recent market action, are sent to about 10,000 subscribers every three weeks. Since he started in 1958, he hasn’t missed a single letter.

He says it’s the longest series of financial commentary continuously written by one person. Today, though, most attention is focused on his Web site, where almost every weekday he posts analysis of market news, and stories about his family or memories from his service in World War II.

About Dow Theory, Richard Russell explain:

“First, we saw the recent April highs in the Averages. Then we saw a plunge in both Averages to their May 7 lows — Industrials to 10380.43, Transports to 4298.12, next a short rally. If ahead, the two Averages turn down and violate their May 7 lows, that would be the clincher. Such action would signal the certain resumption of the primary bear market.”

Dow Theory Letters

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