RICHARD RUSSELL: WE’RE IN THE “DEAD ZONE”
Richard Russell has been very vocally bearish of late. He’s not the only notable investor who has turned increasingly bearish in recent months. Currently, Russell believes we are in the “dead zone” – a sort of no man’s land for the market where we could potentially meander for a while, attempt to regain our footing and then get knocked flat on our backs:
“We’re in the area that I call the “dead zone.” I’ve been here before, and it’s not easy to write in the dead zone. The dead zone tends to appear after a period of dramatic and clearly-defined action. After such periods the market will often act like an exhausted prize fighter who has been knocked down to the canvas. He gets to his feet, but he is unsteady on his feet, and he’s playing for time — until his head clears. He’s fending off the other fighter as best he can, and he’s depending on his experience. Will he make it to the end of the round? But what kind of shape is he in for the next round?
To be more specific, the last significant low for the Dow was recorded on June 7 at 9816, Transports 4038. I want to watch these two points for indications of further strength or weakness.
The Lowry’s figures are important at this juncture. Their Selling Pressure Index at 707 is 462 points above their Buying Power Index which stands at 245. Thus Selling Pressure is in the dominant position, which suggests that the market should work sharply lower at the drop of a dime.”
Source: Dow Theory Letters
He’s still the best storyteller despite being 90 years old.
i call this optimistic
It seems to me that risk reward is shifting again toward a short position: if, as I think, last move is just corrective there shouldn’t be much upside left.
You can be sure that the Wall St. criminals (i.e. all of them)will orchestrate a false breakout above the 200d MA before crashing the market. We need 2 markets: 1) “N.Y. Casino” for traders, liars, scammers, chancers, gamblers, etc. 2)”U.S. Retail Investors” for you and me ONLY, who want to be in for the long haul, who won’t crash the market, endlessly rotating sectors, etc. etc.
“We need 2 markets: 1) “N.Y. Casino” for traders, liars, scammers, chancers, gamblers, etc. 2)”U.S. Retail Investors” for you and me ONLY, who want to be in for the long haul, who won’t crash the market, endlessly rotating sectors, etc. etc.” Scam Alert
Yes, I’m surprised the free market has not provided such alternatives. It may be impossible seeing how everything rests on a fundamentally crooked and unstable banking and money system. It is probably true, therefore, that until we have sound (I did not say gold!) monies we cannot have sound markets.
Can’t wait till were in the Holy Shit! Zone
Wall Street makes the “Star Wars” bar look like an Amish picnic!
Granville is also calling for a new low sometime in 2011.
What is RR saying:
Dow Theory Principles: simple explanations
For New “Bear”/Change in the Primary Trend we need a Lower Low’s in both the IND’s and Tranny’s–Close (WKLY) below 9816 & 4038 -the “Holy Shit Zone”
To maintain the current “Bull”/Confirm the Primary Trend we need higher high’s in both the IND’s and Tranny’s–Close (WKLY) above the Apr Highs
Since we are somewhere in the middle of this “Bullfight” on a daily basis we are in “The Dead Zone/Intermission” waiting for the next parade.
Condition of the “Bull”
“Banderillies” & “Picadillos” protrude from the “Bulls” shoulders.
This “Bull” is clearly Weakened
Can the “Bond-tador’s” perform the “Estocada”
Or because this “Bull” is fighting bravely will we give the “Indulto”
I loved Hemmingway–indulge me.
Of course–giving up the “Flamingo” is hardly an austerity move
so sell everything to cover his calls.
“NUTS”
surrounded by buffalo heads, demanding a surrender,
NUTS
Still too many bears, per investor sentiment. We have a few more weeks of holding up. This market has been very predictable in that it rewards contrarian sentiment. A trader’s market, so trying to make sense of it is plain stupid and will not make you money.
Just as I predicted. A false breakout above the 200 ma was orchestrated, prior to driving the market lower. Now why can’t I act on my own predictions?