Home > Richard Russell Predicts The Dow Will Test 6,547 Level (DDM, DOD, DOG, DXD, DVY)

Richard Russell Predicts The Dow Will Test 6,547 Level (DDM, DOD, DOG, DXD, DVY)

July 21st, 2010

Richard Russell continues his assertion that we are in a primary bear market. Richard classifies the current condition of the market as an upward correction [referring to the rally that commenced in March 2009]. The most troubling insight Richard shares in his latest letter, is his prediction that the Dow will drop to test the 6,547 level. You can find his comments below:

“I want to say that I have a number of reasons for being convinced we have been in an upward correction [referring to the rally that commenced in March 2009] in an ongoing primary bear market. Some of this is based on my interpretation of the 50% Principle, plus my analysis of the very poor action of the “internal market” [i.e. market breadth] over recent weeks.

“I envision the Dow dropping to test, and possibly violate, the 6,547 level. I don’t know whether this will take place this year, but I wouldn’t be shocked if it does. It would not surprise me if the Dow tests the 6,547 level. And if that happens, I can almost guarantee the US will have sunk into the much-feared “double-dip” recession.

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“If the US begins to shrink into a double-dip recession, I expect the Obama administration to go ‘wild’ with new stimuli and ‘make-work’ programs, all of which will be financed with higher taxes (‘soak the rich’) and a further major expansion of the Federal Reserve balance sheet. I would also expect every central bank in the world to simultaneously open their money-printing spigots wide, wide, wide.

“Conclusion in a nutshell: the secret of the forthcoming picture lies with the action of the U.S. stock market. Again I’ll remind my subscribers that the function of the stock market is to discount the future, not to mirror the present. All news is history. Or as Wall Street puts it, “news known is news discounted”.

“One of the biggest mistakes amateurs make is to think something they know is unknown and not already discounted by the market. Despite this, the media insist on describing every move of the stock market as being a reaction to some current event or some new government statistic. They couldn’t be further off the mark. As I read it, the poor action of the current stock market is telling us that the future for the U.S. is bearish and a hard rain lies ahead.

“At this juncture, sophisticated, wealthy people are not concerned with increasing their fortunes, rather they are searching for ways to conserve what wealth they have.”

Related ETFs

SPDR Dow Jones Industrial Average ETF (DIA)
Ultra Dow30 (DDM)
ELEMENTS Dogs of the Dow ETN (DOD)
ProShares Short Dow30 (DOG)
ProShares UltraShort Dow30 (DXD)
iShares Dow Jones Select Dividend (DVY)




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  1. Kugels
    July 22nd, 2010 at 04:11 | #1

    I wish the publishers of prediction articles would automatically republish them again at the appropriate later time so we can all see how reliable the prediction was. I have a feeling that any fool can get on air or get published simply by making an extreme prediction and nobody remembers later how often they were wrong. Yet the orginator of the predicion will crow for years if one of his silly predictions happens to turn out right (and that is bound to happen sooner or later).

  2. Dave Looks For Evidence
    July 21st, 2010 at 17:56 | #2

    This prediction would be OK if you gave just_one_shred_of_supporting_evidence.

    It’s too bad you didn’t, because there are some big issues overhanging the market to be considered. But, without evidence, your prediction is just wasteful fortune-telling. Give people something worth reading.

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