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Richard Russell continues:

“Nobody in America under the age of 70 has ever seen truly hard times. Most under 70 have never even heard stories from their parents about hard times (their parents had never experienced hard times). Ever since World War II Americans have sipped at a punch bowl that was a mixture of borrowing, greed, impatience, debt and inflation. I believe we are now on the path to once again see really hard times, times that force us to think about our current dire situation.

For years America was the shining beacon that allowed the world to see what freedom and free speech and wealth and democracy were all about. America was the dream-land, the ideal. In the years since WWII, that has changed. America is now seen as the meddling, fat, money hungry, war-loving immoral land where you can do what ever you want, and if you have a good lawyer you can get away with it.

Now turning to the stock market, which happens to be my special interest, I believe the stock market is on its way to teach us a hard but needed lesson. I believe that we're still in a great, mysterious bear market. My thought is that ever since May, 2011, we've been building a massive top. The top has been built while the Dow was fluctuating above 10,000. If, or when, the Dow breaks decisively below 10.000, the top will have been completed.

I grew up as part of what is now termed ‘the Greatest Generation.’ Most of us survived the Great Depression and World War II. Compared to today, those were moral times, a time of trial and great hardship.

As I write, I'm watching the quotes on my computer. The Dow two hours after the opening is up one point. The talkers on Bloomberg are discussing stocks to buy. They are unswerving bullish. It never occurs to them that hard times lie ahead and that this is not the time to buy stocks.

As subscribers must know, I'm not fascinated with the news, but I am fascinated with the markets and what they may be telling us. Among dozens of services, I follow two purely technical, market-oriented advisories -- Granville and Lowry's. I've followed these two since the early 1960s.

Granville is now dead bearish based on his brilliant on-balance-volume studies. Lowry's Selling Pressure Index rose above its Buying Power Index during early September. This development from Lowry's is very bearish when combined with Granville's OBV studies and my own studies. It's saying that demand for stocks is weak, and the desire to sell is strong, typical of bear market action.

My advice -- sell any stocks you still own -- sell into all rallies, or stay out of stocks completely. I continue to like gold in all its forms, but I'm afraid that gold mining stocks will tend to go with the general market. Personally, I'm staying with my gold mining stocks until the bitter end. I continue to believe that we'll see a final hysterical blow-off in gold (the metal) that will carry the mining stocks with it.

I see my pen-pal Dennis Gartman, has turned bearish on gold and has sold all his holdings (he's quoted every where). Sorry, Dennis, I disagree with you. Gold is NOT in a bear market.”

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Eric King

KingWorldNews.com

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Richard Russell - I Will Stay with Gold & Gold Stocks to the End

With mounting fears over the plunge in gold and silver and continued volatility in markets globally, the Godfather of newsletter writers, Richard Russell, had this to say about gold, mining shares and stocks in his latest commentary, “I've often wondered why we're here on this good earth. And after maybe half a century of pondering, I've concluded that we're here to learn. Some people even believe that circumstances were prearranged from above so that we would have to learn.”

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December 17, 2011

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