ajtj99's Market Pulse

[challo]

from yesterday -

Russell's bad year gets worse

Recent bull convert concedes bear market; advises cash, T-bills

Already, a September to remember. And the letters fear it may get more memorable.

Richard Russell wrote Wednesday night in his Dow Theory Letters: "Sadly, I must report that the Dow closed today down 449 points at 10609.66 -- a tragic close. This takes the Dow below 10,725, which is the halfway level of the entire rise from the Dow 2002 low to the 2007 Dow high. The great stock market balance has finally tipped over to the downside, and the extent of the potential market losses ahead are now unknown. I was hoping that the downside of the Dow could be confined to the area above 10,725, but this was not to be. I now urge subscribers to move as far as possible into cash and T-bills with a balance against catastrophe via gold coins."
Russell isn't joking. He really must be sad about this.
Just over a year ago, he finally gave up on his longstanding bearishness and conceded a primary bull market was under way.


Now his call looks like a classic whipsaw. This legendary veteran, whose long-term timing record is still excellent according to the Hulbert Financial Digest, has had a rotten year, compounded by recent health problems.
For the record, the HFD's No. 2 performer over the year to date, Peter Eliades of Stockmarket Cycles, recently pointed to a Dow close below 10,790. This would confirm his four-year "preliminary projection" of a decline to at least 8,847.

See Sept. 11 column

Eliades got his confirmation on Wednesday but, in his leisurely fashion, did not update his telephone hotline.
Ironically, one long-time superbear doesn't seem to be benefiting much from the market break.
Martin Weiss of Safe Money Report has been predicting a financial system crash for years.
And over past 12 months, through the end of August, Safe Money is outperforming the market -- just. The letter is down just 1.10% by Hulbert Financial Digest count, vs. negative 10.7% for the dividend-reinvested Dow Jones Wilshire 5000.
Of course we won't know the full effect of this scintillating September for a couple more weeks. But judging by the year to date, though, Safe Money may not be benefiting much.
In fact, it's losing ground. The letter is down 8.5% since Jan. 1, vs. negative 10.3% for the total return DJ-Wilshire 5000.

Still slightly ahead of the market. But not the payday that fans must have expected for enduring quite a lot of pain. Over the past five years, for example, Safe Money has lost negative 1.06% annualized, vs. a 7.85% annualized gain for the total return DJ-Wilshire 5000.
Wednesday, Safe Money put out a cheerful special alert arguing forcefully that "this contagion is nowhere near over . . ."
It urged subscribers: "With the exception of the special situations recommended by Weiss publications or affiliates, get the heck out of the stock market! Then, place the proceeds into Treasury bills or a Treasury-only money market fund."
It also said subscribers should be "fully loaded" with inverse Exchange Traded Funds, "especially designed to surge when stocks fall."
Two specific Safe Money recommendations:
ProShares UltraShort Financials. (SKF), designed to rise 20% for every 10% decline in the Dow Jones U.S. Financials Index, which is comprised of major brokerage, bank and insurance stocks

ProShares UltraShort Cons Svcs. (SCC) , designed to rise 20% for every 10% decline in the Dow Jones U.S. Consumer Services Index, which is primarily in the retail, media and travel and leisure sectors.

There may be something wrong with Weiss' execution. But you get the concept.

http://www.marketwatch.com/News/Story/russells-bad-year-gets-worse/story.aspx?guid=%7BCE7AFBE1%2DB79C%2D4C99%2DBA60%2D05E952A01EBA%7D