Tuesday, June 5, 2012
ONLY THE REAL OLD TIMERS GET IT:
RICHARD RUSSEL: "Important -- Note on the daily chart below that the widely-followed S&P 500 Composite closed below its long-term 200-day (red line) moving average on Friday.
"I'm still stunned by the fact that I received a definite Dow Theory bear signal, and not one other advisor or "expert" appears to have identified the bear signal. I carefully searched the latest issue of Barron's for a sign that any of their columnists had identified the Dow Theory bear signal. Not a hint of it in Barron's.
Thus it appears that Wall Street and the great majority of investors are operating blindly -- by that I mean that they are optimistic and investing, or still holding stocks -- unaware that they are operating in a primary bear market. I've never seen anything like it.
I said that nobody else had identified the bear market signal. I was wrong -- my old friend, Bob Prechter, of Elliot Wave fame caught it. The paragraph below is from Bob's actual recent report.
"By the way, the Dow Transports (Figure 13), by failing to get above their 2011 high, have left behind a striking Dow Theory non-confirmation. Under Dow Theory, if both averages were to break their October 2011 lows, it would confirm that a new primary bear market is in force. Richard Russell taught me that 40 years ago."