Richard Russell – Multi-Trillion Dollar Question, Stocks & Gold
November 13, 2012
Today the Godfather of newsletter writers, Richard Russell, has written about “the multi-trillion dollar question,” stocks & gold. Here are Russell’s thoughts, along with some fascinating charts, in a note to subscribers: “The multi-trillion-dollar question — Are we in a correction or a primary bear market? The answer, unfortunately, is that there’s no satisfactory answer. I hate using the word “hope” in this business, but I sincerely hope that we’re in a correction that might end at any time or at worst in another month or two.”
Richard Russell continues:
“One measure that has become popular is the 20% measure. If the Dow and the major stock averages drop 20% or more, then it’s presumably a bear market. But if you wait for the 20% measure, by that time, you’re broke, so I’d rather depend on the Dow Theory.
I even saw that metric being applied to a single stock today. That stock was Apple. Apple has now crashed over 20% from its high … Apple is now “in a bear market.”
Why am I worried that we could be in a primary bear market rather than a correction? First, the bear signal occurred back in October of 2007. The trouble came following a long climb from the early 1980s. The timing was right for a bear market to appear.