Today the Godfather of newsletter writers, Richard Russell, warned his subscribers “... the
world's supply of silver has grown dangerously low.” Russell also had
some fascinating comments regarding gold, and stocks, including some
great charts. Here is what Russell had to say:
“If a problem has no solution, it may not be a problem, but a fact --
not to be solved, but to be coped with over time.” (Shimon Peres) As I
read the quote, I relate it to the FACT of the US's debt. This is a
situation that can never be solved honestly -- it's a fact. A fact that
our children or our grandchildren will have to cope with. How they
cope with it will set the course of the world of tomorrow.”
Richard Russell continues:
“The month of January was a
winner, and according to Yale Hirsch (he edits the Stock Trader's
Almanac) if January is an up month the odds are that the rest of the
year will also be up. Newspaper or magazine headlines seldom get it
right, but courageous Barron's keeps trying. The cover of this week's
Barron's shouts in large red letters -- STOCK ALERT! GET READY FOR A
RECORD ON THE DOW.
I've posted five years of
the Dow on the chart below. At the bottom of the chart we see the
89-day rate-of-change. It seems so easy -- all the Dow has to do is
climb another 174 points, and eureka, it's at a new record high, and at
the same time it has confirmed the new record highs in the
Transportation Average. Wait, note that RSI is at its severe overbought
zone for the first time in almost two years. In the last five years,
RSI has signaled overbought five times. At the bottom of the chart we
see the 89-day rate-of-change (this is momentum).
I keep thinking about that
giant surge among the silver miners. Was that surge telling us that
silver is preparing to take off to the upside? I'm not sure, but it has
certainly worked to keep my eyes on silver. I know that the world's
supply of silver has grown dangerously low. Whereas ten years ago there
were three billion ounces of silver above ground and there for the
taking, today there are less than one billion ounces of silver
available. And unlike gold, silver is actually consumed.