Richard Russell - Gold Trading Above $1,500 is Bullish Action
With the recent plunge in gold and silver and continued stock market volatility, the Godfather of newsletter writers, Richard Russell, had this to say in his latest commentary regarding gold and stocks, “Do you remember the vicious bear market of 2007-2009? And do you remember how our brave and brainy Fed rushed in with trillions of computer-created dollars to halt the damage? I said halt but I didn't say end the bear market. A tremendous rally followed the 2009 low, and this rally took the Dow back to, and above, the 12,000 level.”

Richard Russell continues:

“This current bear market rally is comparable to the tragic fooler bear rally that followed the 1929 crash. But in extent, this bear market rally (I'm talking about the one that followed the 2009 low) was even greater than the 1929-1930 rally. And just as 1929-1930 fooled many investors, who re-entered the market thinking that they would recoup their 1929 losses, this giant 2009-2011 rally sucked in thousands of hopefuls back into the stock market again.

The great bear market rally is now about over, following a very long period of deceptive distribution. I am warning all my subscribers again that we are back in the grip of a vicious and ruthless bear. The bear has been held back for almost two years, due to the so-called quantitative easing of an anxious and ignorant Fed. There's no bear angrier than a frustrated bear. As a result, I believe we're going to see a brutal stock market that will shock the Fed and the bulls and the public -- and all who insist on remaining in this bear market.

I think we'll see selling of gold to cover losses (particular losses by the short sellers), but ultimately gold will be the last man standing. But most important -- GET OUT OF STOCKS.

I've been watching the Bloomberg TV channel all day. I 've heard nothing but gold is falling and is in a bear market plus a never-ending list of stocks to BUY! Nobody's talking about selling or the possibility that we're in a bear market.

I write about markets; this site is just not a substitute newspaper. Watch to see whether any newspaper or advisory comes out and declares that we are back in a major bear market. This bear market will leave its mark on everything: housing, commodities, banks, employment, consumers, retail sales, and nations around the world. It will go down in history. Sell your stocks. Get as liquid as you can. The ultimate liquidity is Constitutional money -- gold and silver.

I might be early, but I'm giving you the big picture -- the one that counts in the end.

I noted lots of cheering regarding the huge Black Friday retail "bargain" sales and then more cheering after the record Monday sales. I didn't think the huge sales were bullish. I took them as the public spending it's head off again -- instead of saving and acting out of austerity. The massive public spending is simply going to leave consumers with less money to spend in the future (and less savings). The more impressive action would have been the public acting conservatively.

The fading euro causes the dollar to strengthen, and in turn a strong dollar puts pressure on gold (gold that is measured in dollars). Gold holding above 1500 is bullish action.

Remember, the KEY number for the Dow is 10,000. Below 10,000, the bear really takes over. This early part of the resumption of the bear market will start very slowly and gingerly, and then later it will accelerate. Rallies will be frequent and disappointing.”

To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE.