The author of the closely-watched Dow Theory Letters newsletter warned investors to get out of US stocks now in a report published Tuesday.

“Just as for years I asked, cajoled, insisted, threatened, demanded, that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (… not including golds) and get into cash or gold (bullion if possible). If the [Dow Jones Industrials and Transports] violate their May 7 lows, I see a major crash as the outcome…”

“… 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.

Richard Russell wrote that there is a risk of a “major crash” if the Dow Jones Industrial Average falls below the May 7 closing price of 10,380.43, according to several media reports.

“If I read the stock market correctly, it’s telling me that there is a surprise ahead,” Russell wrote. “And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.”

via The Daily Crux