A Richard Russell Reminder

Remember this warning from Richard Russell?

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

Read more: http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5#ixzz0wLGFh4Ic

We just dropped below the May 7 lows again on the DJIA (10,380) and on Transports (4,298) and momentum is moving downward:

Notice that VIX has rebounded past the 200 day MA and may soon challenge the 50 day MA.  Not a promising development for investors.

I have adjusted my portfolio to withstand another serious market correction and preserve capital.  During the deflationary season of Economic Winter, there is greater emphasis in return of capital rather than return on capital.

In my next two posts I will examine the "recovery" and draw my own conclusions and then look at some of the risks and uncertainty that fiat monetary policy presents to investors, as well as its threat to civil liberties and the essence of democracy.