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Richard Russell continues:
“Lowry's Buying Power Index has risen a bit and their Selling Pressure has dropped noticeably. This means that there is less supply overhanging the market and the willingness to buy has increased. On top of this my PTI has been climbing steadily due North, and as I've always said, my PTI is smarter then I am.
In the face of improving economics, Joe Granville's on-balance-volume figures remain bearish, and Joe is looking for a wicked summer. The dividend yield for the Dow is 2.51%. deep in overbought territory.
After years of outperforming stocks, gold is now weakening on a relative strength compared with stocks. The chart below shows the ratio of stocks to gold. After plunging in July in favor of gold, the ratio has been surging higher in favor of stocks over gold.
Gold is stopped at its 50-day MA, and I am watching for a breakout into the 1700s. I understand there are huge short positions on the Comex, and the shorts are feeding out a mass of paper shorts in a do-or-die battle to hold the prices of silver and gold down. MACD and RSI remain bullish for gold.
Last week, despite the strong dollar, silver surged and closed above its 50-day MA (see above chart). It may be that the action of strong silver will rub off on gold, taking gold above 1700.”
Russell is right when he says there is a battle going on in the gold and silver markets. Right now, the bulls have the wind at their backs. On the other hand, the bears are facing oceans of sideline money from fund managers around the world. If this money begins to enter the relatively small gold and silver markets, there is no question the bears will be gored by the advancing bull.
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© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
Richard Russell: COMEX Gold & Silver Shorts in Do-or-Die Battle
With gold and silver consolidating recent gains and the Dow closing yesterday near the 12,700 level, the Godfather of newsletter writers, Richard Russell, had this to say in his latest commentary: “The character of the market is improving. Volume on Friday's buying was the strongest of the year with upside volume being 85% of total upside plus downside volume. The negative spread between Lowry's downside and upside volume contracted from 190 last Friday to 169 yesterday, a huge improvement.”
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
January 24, 2012
