The New America
by Richard Russell
by Richard Russell: Eurozone
Oh, where have
you been, my blue-eyed son?
have you been my darling young one?
stumbled on the side of twelve misty mountains
walked and I've crawled on six crooked highways
stepped in the middle of seven sad forests
been out in front of a dozen dead oceans
been ten thousand miles in the mouth of a graveyard
a hard, it's a hard, it's a hard, and it's a hard
a hard rain's a-gonna fall. (courtesy of Bob Dylan)
The New America
"We are heading into what may be the dirtiest presidential
campaign in history. The Obama campaign is planning to use the one
billion it hopes to raise to portray the Republican nominee as a
dangerous, heartless radical. That nominee is sure to respond with
a withering counter-assault." from The Week magazine.
"Just to replace
all the jobs lost in the recession and keep up with the population
growth, the economy would have to add 275,000 jobs a month for the
next five years." NY Times.
service announced this week that it would dramatically scale back
services in a bid to save itself from bankruptcy. The USPS wants
to shut over half of its 247 mail processing centers and eliminate
28,000 jobs." William Falk in The Week.
With the stock
market acting poorly, commentators are constantly searching for
good news or encouraging statistics in a bid to stir up bullishness.
They are wasting their time. The markets do not move on current
The real story
is in the action of the stock market itself. I
refer to the Lowry's statistics. They show that the urge
to buy stocks (demand) is weak and sluggish. Conversely, the urge
to sell stocks (supply) is strong and surpasses the desire (demand)
to buy. These are not guesses. The Lowry's figures are
derived from the actual daily transactions, based on daily volume
and total points gained or lost each day, on the NYSE.
Index crossed above the Buying Power Index in early September. This
was a very significant event showing that we were seeing an important
technical CHANGE. Following the cross-over, the peak of weakness
occurs when the distance between the higher Selling Pressure Index
and the lower Buying Power Index is at its widest spread. On December
7 the negative spread between the two indices hit its widest spread
of weakness at 168 points.
allows us to measure the extent of the growing
weakness in the bear market. On Dec. 7 the negative spread was 168.
By Dec. 16 the spread had widened to 207.
I talked with
my good friend, Joe Granville, over the weekend, and Joe is as bearish
as I've ever seen or heard him, based on his OBV volume figures.
This checks with my own work and studies.
scour the news for indications of bullish news, the internals of
the stock market continue to deteriorate. Even the action of the
stock market is bearish as the market rallies on dull volume but
declines on higher volume. Furthermore, rising breadth is narrow
on rallies while declining breadth is broad when the market heads
I don't know
what more I can do or say to convince subscribers that we are seeing
the resumption of the bear market. This means that we should be
OUT of all stocks. As for gold mining stocks, this is a personal
choice. In due time, I expect gold to fully express itself with
a huge upside blow-off. At that time I expect gold mining stocks
to follow, but between now and then gold mining shares will probably
be hit like every thing else by the fury of the bear market.
I should add
that I am expecting this bear market to be far worse than most people
expect or are prepared for. The fact is that I don't believe that
Americans expect any thing more than a temporary spate of difficult
times, an annoying patch that should be over in a year or so. This
is not what I am expecting or predicting.
Once the Dow
breaks under 10,000, I believe that the analysts and the PUBLIC
will become frightened and start to cut back on their buying. The
newspapers will halt their bullish stance, and a great stillness
will envelope that land. That stillness will be the result of shock
as it dawns on Americans that they are seeing something far different
than what they were expecting.
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© 2011 321 Gold