the famous writer of the Dow
Theory Letters, has a chilling line in today’s note:
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.
By popular demand, here’s more on what he sees in the market. The
gist is that the markets recent gyrations are telling him that the
economy is in trouble:
And I ask
myself, "Am I seeing things? The April 26 high for the Dow
was 11205.03. The Dow is selling as write at 10557 down 648 points
from its April high. If business is even better than expected,
then why is the Dow down over 600 points? And why, if there were
674 new highs on the NYSE on April 26, were there only 20 new
highs on Friday, May 14? And if my PTI was 6133 on April 26, why
is it down 17 points since its April high?