Richard Russell has made a name for himself as a fortune teller for investors seeking to stay a step ahead of the stock market. Russell, in his Tuesday Dow Theory Letter prediction, forecasts a devastating stock market crash that will render America, by the end of 2010, simply unrecognizable. Others also forecasting a crash are other pundits who attempt to divine future events by studying and comparing stock market trends.
Source of Article: Richard Russell to investors: get liquid before the crash
Richard Russell and his Dow Theory Letters
Simply because of his comments, observations and stock market philosophy, Richard Russell’s Dow Theory Letters have gained a huge following in financial circles. Russell covers the U.S. stock market, precious metals, commodities, foreign markets, bonds, politics and economics. In the latest Dow Theory Letter, Business Insider reports that Russell advises investors to get out of the stock market altogether, avoid fast cash loans, eliminate debt and convert all wealth into liquid assets:
Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the stock market told him.
Global Macro Investor sees his case
Richard Russell shares a kindred spirit with Raoul Pal, despite the fact Pal thinks the stock market apocalypse will occur in matters of days or weeks, instead of months. Pal is a former Goldman Sachs executive who authors the Global Macro Investor, an independent research publication. Pal claims to have been examining a classic pattern in the stock market that has resulted in historical financial disasters — a spiky turn down followed by a failed rally followed by a collapse.
The Dow Theory forecasts
Despite improving business news, Richard Russell’s Dow Theory forecasts call attention to a deterioration in the stock market since April. Shoring up the Global Macro Investor prediction, Russell presents a narrative that discloses recent April highs in the Dow and S and P Averages, followed by a sharp drop in both Averages to May 7 lows, followed by a short rally. If the two Averages turn down again to fall below their May 7 lows, the Dow Theory forecast is that a market collapse is inevitable, based on historic data.
Stock market crash unavoidable?
During the four days that ended May 7, the Dow Jones Industrial Average sunk to the lowest level since Feb 26, 10,380.43, falling 6.9 percent. The San Francisco Chronicle reports that the transportation gauge closed at 4,298.12, down 11 percent in four days. Downgrades of Greece, Portugal and Spain helped set off the fall as the prospect of a sovereign default in Europe undermined investor confidence.
Market listens when Russell speaks
The Dow Theory Letter from Richard Russell is taken quite seriously by investors. Chances are his prediction of a stock market crash will encourage a stock market sell-off and a run on cash and gold. Claiming to have been the first to recommend gold stocks in 1960 is Mr. Russell. Russell claims to have predicted it all – the 1949-66 bull market, the foot of the great 1972-74 bear market and the start of the great bull market that began in December 1974. The Dow Theory Letters began publishing in 1958 by Russell. Dow Theory Letters is the longest-running investor newsletter continuously written by one person in the financial industry.
