This is a special Letter . If there are typos, please excuse us . Why a special? Because certain ideas have clarified in my mind, ideas that I introduced in the last few letters, and I want to get them to you now. I do change and alter my ideas - that's why I publish 36 Letters a year instead of a dozen!

"Consider the work of God; who can set straight what he has made crooked? When times are prosperous, enjoy your happiness ; when times are bad, consider this: The one is God's doing, as is the other, in order that man may know nothing of his destiny. . ., . " Ecclesiastes 7:13

THE MARKET: Like the Biblical writer above, we know little of our personal destiny or our investment destiny . I have succeeded so far in keeping my subscribers out of the worst market collapse since 1929-32. For eight years I have held steady to a policy of cash (or Treasury bills), gold shares and unlimited patience . I presume that I must have done something right, because over the past year (during these most difficult times) subscriptions to this report have. doubled, taking them to the highest level in seventeen- years .

I am most grateful to my veteran subscribers and to my many new ones. I know that in a time of recession, universal gloom and shattering losses, a check for $95 for an investment service is not an easy thing to part with. I hope that some of the market losses that were avoided (if you followed my advice) more than make up for the cost of a subscription. At any rate, I find that I am sweating just as much this year as last . And that isn't because of the increased subscription list, it's because Wall Street isn't getting any easier (or perhaps I'm not getting any smarter) .

On to the market : Turning to the long chart on page 1, let's see what is happening to the various indices and averages which we are using to measure the depth (or the death) of the great bear. On December 13 and again on December 16 the Primary Trend Index or PTI (which is my own composite of eight critical indices and averages) recorded brand new bear market lows. On December 16 the advance-decline ratio for the NYSE recorded another bear market low. But note that none of the Averages, our gauges of the actual price movement, have confirmed on the downside .

As a rule, the longer a primary trend is in force, the less the significance of preceding points in the Averages. Thus, I show a bear market low of 116. 69 in 1970 for the D-J Transports.

Four years have elapsed since that low, and I therefore do not accord too much importance to that earlier low. However, the Transports struck a low of 125.93 on October 3, 1974 . One day later (Oct 4) the Industrials touched a low of 584. 56 . On December 6 Industrials broke to a new bear market low of 577. 60 (see page 1 chart) . Transports have not yet confirmed . This could prove to be very significant . Time will tell. Also on the significant list is the fact that so far, the D-J Utilities, the D-J Bonds and the S S P 500 Average have refused to confirm the December 6 low on the Dow. The longer this condition prevails, the more hopeful the overall picture for the market in general .

Question : Russell, are you saying that we could have seen a major bear market bottom? Answer: I'm saying that it is possible, that I now feel better than 50/50 about it. Frankly, there are a number of phenomena I would like to see, but as I have said so often, they don't run the market for Richard Russell . For instance, I would like to see much more odd-lot shorting, I would like to see more skepticism on the part of advisories concerning the periodic rallies . I would like to see even blacker sentiment (regarding securities) than we now see . I would like to see the Averages form a dragging, low-volume bottom . I would like to see stocks act totally immune to bad news (although they still get hit somewhat when bad news emerges) .