As people continue to digest breaking news out of Greece and around the world, the Godfather of newsletter writers, 90-year-old Richard Russell, warns about the most dangerous bubble in the world, and it will surprise you. Russell also discusses what it all means as well as how investors can protect themselves.
Richard Russell: "Below we see a chart of the Dow Jones Transports. The Transports have (recently) plunged below both their moving averages to a new six-month low.
Surprisingly, the Dow and the S&P have recently recorded new record highs. Has this ever happened before – a new high in the Industrials against a six-month low in the Transportation average? I’ve combed through my charts of the averages and I can tell you that this has never happened before.
What Does It All Mean?
But what does it mean, and what is it telling us? Transports have tested their lows and are moving higher. This action calls for a bottom in the Transports. With the Transports bottoming, the entire stock market is set to move higher.
The goods may be manufactured (Industrials) but they must be sold and shipped (Transports). The Transports are acting as if the economy is coming to a halt. The Fed and the government claim that the statistics for the first quarter were biased to the downside by rotten weather and remnants of the great recession. Wall Street and the Fed now wait anxiously for news of the economy for the second quarter.
The dollar is down hard and surprisingly, gold is lower. With the stock market stronger across the board, it may be that the Fed will take heart and produce an interest hike (probably a very small one) later this year. The stock market is telling us that the economy is improving.
The Most Surprising And Dangerous Bubble In The World
I read dozens of newsletters and market advisories and almost all of them are scratching their heads as they attempt to call a top to this bull market. Today many people are asking if there is a bubble and if so, where is it? My answer is that the bubble is in the production of fiat currency and I keep one proverb in mind, “no tree grows to the sky.”
I’ve never seen a top formed when so many advisors are searching for a top. I’ve been thinking about this market night after night, and my conclusion is that it’s fruitless to try and call a final top. It comes down to a matter of philosophy, why try to do the impossible? Method after method has attempted to call a top, but so far nothing has worked.
The stock market continues to confound serious and seasoned investors. History is being made as investors tear their hair out while attempting to position themselves in this strange environment.
My Conclusion Is To Own Pure Wealth – Physical Gold And Silver
My conclusion is that if nothing works, stop trying. My advice is to be out of the stock market and to take a position in pure historical wealth, which means a position in physical silver and gold.
If you don't know what the market is telling us, don’t act as if you do know. Step aside and watch the show; history is being made. The best we can do is avoid major losses. So take a step back and enjoy a period unlike any that has ever occurred before.
Auction And Real Estate Markets Are On Fire!
Many smart investors who have access to unlimited funds have turned to the auction markets and real estate in New York. In the auction markets we are seeing one of a kind items going for astoundingly high prices.
Recently, the Christie’s auction house set a record of one billion dollars in sales during a single day. A 26 carat diamond sold for over $100 million, a record for a single gem stone. A Picasso painting sold for over $140 million, a record price for any item on auction. Prize apartments have sold for over $100 million while they remain vacant.
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Late Notes — Fifteen minutes before the close, Industrials are up 104, Transports are up 100, and the Nasdaq is up 20. The stock market likes today’s action. Gold is down 9 to 1185 and silver, which is acting better than gold, is down 0.29 to 16.51. My interpretation is Transports hit bottom." I would urge all KWN readers around the world to subscribe to Richard Russell's 90 years of wisdom and remarkable writings at Dow Theory Letters by CLICKING HERE TO SUBSCRIBE.
***ALSO JUST RELEASED: Mark Mobius Warning And 4 Of The Most Astounding Charts Of 2015 CLICK HERE.
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