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Richard Russell snippet....

  1. "Big Picture -- I have an "advanced" computer program which allow me to punch out a long list of stock charts daily, weekly, monthly on arithmetic or log scale.

    This morning I went through a list of averages, indices and stocks -- using nothing but monthly charts.

    This may sound crazy, but what I see in the majority of stocks and indices is that most of the stocks and indices are in the early stages of this bear market. I see enormous tops, many of which are in the early stages of breaking down.

    These tops are, in fact, the largest tops I've ever seen in the stock market, many of them having begun to form in early 1998. That means that distribution has been going on in most cases for over four years.

    I'd say the beginning of real bear market breakdowns begins on a long-term basis when the 20-month moving average drops below the 40-month moving average.

    On the S&P this bearish crossing of the moving averages occured in November 2001.

    For the Dow the bearish crossing occurred in January of 2002.

    For the Wilshire the bearish crossing occurred in November 2001.

    For the NYSE Composite (all NYSE issues) the bearish crossing occurred in February of 2002.

    For the NYSE Financial Index (all financial stocks) the crossing has not yet occurred, but it is close.

    So my conclusion is that this bear market has a great deal further to go. As I said, in most cases the breakdowns on the monthly charts is just beginning.

    I don't know what fundamenals will have to occur to drive stocks down to where I think they are headed. I don't know what news events will occur to send stocks down to the lows that I project on these charts.

    I can just tell you that what I see on these charts are future disasters, unaccountable bearish events -- events that will take stocks down to level that will amaze today's bullish army of investors."

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