The Box

Richard Russell - snippet
Dow Theory Letters
Sep 4, 2007

Extracted from the Aug 31, 2007 edition of Richard's Remarks

Gold
I know a lot of my subscribers own gold in various forms including gold shares. Below we see a chart of GLD, the gold ETF. The formation is in what I call "the box."

The box I'm talking about has support at 64 and resistance at 68. Today GLD is trading above 66. Somewhere ahead I expect gold to advance to the breakout point, which is 69.

If GLD can hit 69, it's off to the races. A huge accumulation pattern, a massive base, will propel gold much higher. If GLD makes it to 69, it should be quite a show.

Patience.

Energy
Q. "Russell, I can't put all my money in the Dow (diamonds). Where else can I go?"

A. OK, aside from an honest man, what's the rarest thing in the world? It looks like it's going to be energy. With the Chinese buying cars, and the Indians buying air conditioning, there won't be enough energy available, not at today's prices. The life-blood of the civilized world is energy. And XLE is a direct way of participating. The ETF has consolidated since June, and it turned bullish this month. I like XLE. I mean, if the energy business doesn't do well, then what the heck will?

lots more follows for subscribers...

Aug 31, 2007
Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters
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