Notes from:
Richard Russell's
Dow Theory Letters
P.O. Box 1759
La Jolla, CA 92038
www.dowtheoryletters.com

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I've been sensing something BIG and ominous is in the offing. What could it be? Ah, a front page article in Sunday's NY Times supplies the answer. Israel will attack Iran with nuclear bombs. Israel must attack this year for this is the year when Iran will have nuclear capabilities.

Actually, the stock market is acting as though something momentous and frightening is 'out there.' The roof of a monster top is building. Gold keeps creeping higher.

If Israel attacks the Mid-East will go up in flames.

Suggestion -- dollars and gold. If the dollar collapses, gold will make up for the losses by sky-rocketing.

The next target for gold -- to trade into the 1800s, and it's getting close.

The Dow is fluctuating around the 12700 area, not surging above it or falling decisively below it.

If you listen carefully, you can hear the heart-beat of the market. It's a slow, heavy beat, as if the market is waiting for something. That something is going to be BIG. Bigger than what anyone is expecting.

2012 is fated to be a monster year. Keep your eyes on the dollar and gold, and the newspaper headlines!

That's all for Thursday.

Notes from:
Peter Schiff
CEO - Euro Pacific Capital Inc.
Westport, CT 06880
http://www.europac.net/

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With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding down unemployment, propping up stock and housing prices, and monetizing government debt. To do so, it will continue to pursue a policy of negative interest rates, while ignoring the collateral damage of unsustainable debt, virulent inflation, misallocated resources and credit, suffering yield-dependent retirees, and a devalued U.S. currency.

Notes from:
Richard Russell's
Dow Theory Letters
P.O. Box 1759
La Jolla, CA 92038
www.dowtheoryletters.com

__________________________________________________

What about gold? Remember gold? Don't worry about the yellow metal. Over the last week gold has broken out above a bearish trendline and the direction is now UP. The next task -- for gold to trade in the 1800s.

Notes from:
Richard Russell's
Dow Theory Letters
P.O. Box 1759
La Jolla, CA 92038
www.dowtheoryletters.com

__________________________________________________

Is it a correction in a bull market -- or is it a rally in a bear market? Nobody seems to have the definitive answer. Confession, I'm not certain as to which it is.

Over the last ten years the benchmark S&P 500 has done very little. Stock owners have been sitting with their stocks and twiddling their thumbs.

Gold closed on the last day of 2010 at a price of 1421. I'm looking at my computer, and I note that Feb. gold is now selling at 1724. This is a rise of 20% since the end of 2010. I'm satisfied -- gold is in a 12-year bull market, and I don't believe the end is in sight.



Late Notes
The character of the market is changing. Today is the third of the last four days that the Dow has been down. As for gold, it is now in the 1700s and slowly creeping higher. My choice: gold and dollars. Nothing more and nothing less.