La Jolla's Richard Russell, who has published Dow Theory Letters since 1958, has stated that stocks are now in a primary bear market. Russell is the preeminent interpreter of the Dow Theory, which is based on essays written by Charles Dow, founder of the Wall Street Journal. There are a number of tenets of the Dow Theory, but Russell bases his current call on the fact that the Dow Jones Industrial Average rallied beginning in early December, but the Dow Jones Transportation Average did not. Then both averages turned down. Under Dow Theory, this means the overall market is in a primary trend, says Russell

Russell told one publication that the Dow Jones Industrials could sink to 8000, 6000, 4000 or even 2500. "I'm afraid [the Dow Jones Industrial Average] has a long way to go," he told the publication.

Some criticize Russell for being too bearish through the years. I don't agree with that. For example, during the 1980s, he told his readers that the market was quite overvalued, but still in a bullish trend. It turned out to be a very good call. Personally, I consider the Dow Theory only one of several reliable technical market indicators. My problem with Dow Theory now is that it tends to correlate moves in the market with moves in the economy, when it seems clear to me that stocks are moving on central bank-created liquidity, not economic performance or prospects. Indeed, stocks today are supported by a weak economy that motivates central banks to pump in more liquidity. That said, however, I believe in Richard Russell. He has an excellent record. He is 88 years old and last year had hip replacement surgery. Dow Theory Letters has 12,000 subscribers at $300 per. Do the math.