Home   Links   Editorials

What's the word, mocking bird?

Richard Russell snippet
Dow Theory Letters
May 18, 2010

May 17, 2010 ...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.

Question -- Russell, if you're so damn smart, then how is it that most of the economists and analysts disagree with you? The fact is that most experts are now bullish on both the economy and the stock market.

Answer -- I think Washington and the economists have brain-washed themselves. They are so blasted anxious to be optimistic, they are all listening to each other and all thinking alike. And when everybody is thinking alike, nobody is thinking.

Gold -- I just talked to Leon, my old and trusted friend and coin dealer (858 459 2228). I asked Leon about Krugerands. "Can't get 'em," he said, "Europe's cleaned 'em out -- they're buying all they can find." But American Eagles are still for sale.

America's greatest fear is deflation, as per the 1930s. Germany's greatest fear is inflation, as per the 1920s.

Headline in the May 16 Financial Times -- "GERMANS LEAD GOLD RUSH FRENZY. We have some extraordinary sales to German customers," says Deborah Thomson, the Rand treasurer. "The refinery which usually sells 2,000 coins to each customer at a time, said that last week it received an order from a German bank for 30,000 coins. Another banks requested 15,000 coins."

Late Notes -- Another nasty and misleading day. Dow up, Trannies down. More "internal market" destruction. Breadth on the NYSE down. Down volume on the NYSE was 59% of up + down volume. My PTI was down 4 to 6112. MA was 6076, so my PTI is bullish by 36, lowest number in months.

As we used to say, "What's the word, mocking bird?" The word, dear subscribers is "trouble ahead."

Russell suggestion -- 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.

And as we say a fond good bye to Monday, we look forward.

Russell belief -- behind every government or agency lies a secret crime against either the American people or the US Constitution.


Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters

© Copyright 1958-2014 Dow Theory Letters, Inc.

Richard Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.

He offers a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $300, tax deductible if ordered through your business).

321gold Ltd