Richard Russell - Gold, Stocks  

With continued uncertainty in global markets, the Godfather of newsletter writers, Richard Russell, wrote, “...we see the stock market up on Fed-created stilts ... I'm stating that deflationary and deleveraging forces are still in command, and all the Fed's manipulations are, and will, fail to turn the bear market into a new bull market.”

“Most of my subscribers are interested in gold. All I'm going to say about gold is wrapped up in the chart below. Here we see gold in a large rectangle formation. The 1550 level has been tested numerous times and it has shown to be solid support.”


“Now gold has its choice of breaking out on the upside of the rectangle or on the downside ... It's obvious that there are buyers at 1550 or below, and that there are sellers near the 1800 area. All of which has given us a trading range of almost one year.

It's always educational to view the stock market as a ‘big picture.’ For that I'll include the Wilshire 5,000, below. The Wilshire includes almost all stocks traded on the NASDAQ, the Amex and the NYSE. I ran a horizontal line on the chart starting from the May 2011 Peak. Note that the Wilshire is below the 2011 peak now. Thus, since May, 2011, the mass of US stocks are actually down. And so are most portfolios.

Right now, US stocks are at a standstill -- caught between two opposing forces. The positive force is the hope of additional Fed stimulative action. The negative force is the primary trend of deflation and over-production.
..........................  Richard  Russell