Are stocks and bonds overdone?
*Dow Theory Letters, by Richard Russell, April 26, 2010:
''We're dealing with a tricky rally (some call it a cyclical bull
market) in what I believe is a continuing primary bear market. At
this point, the stock market is over-valued, over-loved and over-bought
-- but it keeps advancing as it feeds off a parade of good news and
massive liquidity. Obama states that he'll cut the deficit by
two-thirds in the next five years. 'What's he smoking?' I think
The bond market has turned long-term bearish and interest rates are heading higher.
The bull market in gold is 10 years old and is still strong.''
''Most Americans (including many fund managers and advisors) don't understand the attraction or the meaning of gold -- and many pride themselves on not being 'gold-bugs.' If they're not a gold-bug, then they must, by default, love fiat money, in which case I call you a 'dollar-bug.' The very name, 'gold-bug,' is derogatory, implying that anyone who prefers gold to central bank junk paper is some kind of a moron or a lowly bug. Was King Midas a bug? Was France a bug-nation when in the early 1970s it continued to call in US gold in its settlement of debts? Is the US a gold-bug nation when it refuses to give up part of its huge store of gold in settlement of international debts?
What I'm excited about is the recent action of gold. Often gold is down in the after-market, but when actual trading starts, gold will turn positive during the day. It appears that certain parties wait for the dips, and when they don't get the 'dip' they're waiting for, they give up and buy gold at the market price, thereby pushing up the price toward the 1200 level. It seems that 1100 now represents important support for gold, and the upside target is 1200 with the breakout target at 1226.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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