RICHARD RUSSELL ON GOLD & OIL
Gold hit a low of (846 (June gold) on May 1, and has been in a bullish trend ever since. It would not surprise me to see gold at a new high by year end. But new high or not, I'm holding on to my gold, my home, my two standard poodles and my faithful wife of 22 years (as long as she'll continue to put up with me).
Can anything stop OIL from its relentless march toward the heavens? Doesn't seem so. How about just being overbought, as it is, according to the weekly chart below -- will that stop the climb? So far -- no.
Speculators are loading up on oil options which pay off at oil at over-140 or over-150 or over whatever future number you can come up with. Of course, those options are expensive, but when an item is hot, you pay -- that's the name of the game. No a much better game is to buy the options when nobody wants them -- just before an item becomes hot.
Richard Russell
Editor-in-chief - DOW THEORY LETTERS
http://www.dowtheoryletters.com
May 21, 2008
The inimitable and venerable Mr. Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron's during the late-'50s through the '90s. Through Barron's and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-1966 bull market. And almost to the day he called the bottom of the great 1972-1974 bear market, and the beginning of the great bull market which started in December 1974.
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