Russell changes opinion on gold

Marketwatch reports that Richard Russell is now saying to put new money into stocks instead of gold (article).

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Richard Russell, editor of the Dow Theory Letters newsletter, believes we could very well see a continuation of these trends in coming months. As a result, he is now recommending that investors allocate any new monies to stocks rather than to gold.

This will come as something of a shock to gold's defenders, since Russell for several years now has been favoring gold over equities. But, on the basis of his technical analysis of gold and stocks' relative strength, Russell has changed his mind.

Russell bases his technical analysis on a ratio of the DJIA to gold. This ratio hit its all time high in mid 1999, for example, at around 43.85-to-1, which meant that "one share of the Dow would buy 43.85 ounces of gold.
By May 2006, in contrast, this ratio had declined to 16-to-1."