Monday, May 2, 2016

Dow Theory Update for May 2: Gold finally confirms Silver's higher highs



Trends unchanged




US STOCKS

The primary and secondary trend (as determined by Schannep’s Dow Theory) is bullish, as explained here and here.

On April 19th, the Transports broke out above its March 18th, 2016 closing highs (secondary reaction highs), and, hence, according to the “Rhea/classical” Dow Theory (which only uses the Industrials and Transports in order to look for confirmations), a primary bull market was signaled.

By the way, now we have a triple confirmation, which is normally good.


GOLD AND SILVER

The primary trend and secondary trend is bullish, as reported here and here.

SLV has recently made higher closing highs which were unconfirmed by GLD. On April 29th, GLD made higher closing highs, and hence confirmed, which tends to be positive. However, such a confirmation has taken quite a long time (more than 2 weeks), and hence, it might be indicative that a secondary reaction is coming soon.

Here you have an updated chart:

 
GLD (bottom chart) has finally deign to confirm

GOLD AND SILVER MINERS ETFs

The primary and secondary trend is bullish as explained here

On the other hand, SIL’s higher highs have been confirmed by GDX’ higher highs, so technically the primary bull market remains unchallenged.


Sincerely,
The Dow Theorist

Wednesday, April 27, 2016

Dow Theory Update for April 27: Most hated bull market now has some breath behind it





Trends unchanged


US STOCKS

The primary and secondary trend (as determined by Schannep’s Dow Theory) is bullish, as explained here and here.

On  April 19th, the Transports broke out above its March 18th, 2016 closing highs (secondary reaction highs), and, hence, according to the “Rhea/classical” Dow Theory (which only uses the Industrials and Transports in order to look for confirmations), a primary bull market was signaled.

By the way, now we have a triple confirmation, which is normally good.

You know that I felt (and I still feel) very bad about the current primary bull market signal. “Fundamentally” (oh my!) and even “technically” I was very skeptical as to the validity of the current primary bull market signal. However, I also know, as Russell was fond of saying, that the market is more intelligent than I, and hence I honored the signal.

Well, ex post facto (after the fact) now it seems that breadth is getting very positive and the “internals” of the US stocks market are pretty good after all. At least, this is what Zero Hedge in his post “Is Breadth Signaling More Than Meets The Eye In This Market?" seems to suggest when saying “if you are bullish, it is almost a certainty that the rationale for your position is more sound than any that can be concocted from this data.”.


Josh Brown, of the “Reformed Broker” full of good sense accepts that it is a fool’s game to try to outsmart the market. His post “Anger at 18,000 is a must read. This is one gem from his article:

“One of the things I am thankful for personally is that I stopped playing the guessing game professionally about where markets were headed roughly six years ago. The game was endlessly frustrating and I was never any good at it anyway. Running money based on evidence and rules, as we do today, has made a huge difference in my life. I can’t imagine ever going back to the way things were for me from 2000-2010.”



Personally, I trust more the Dow Theory than breath indicators, and hence I still believe anything can happen. The takeaway, though, is this: Nobody can predict the future. There will always be ex post facto explanations for recent market behavior. However, all this is clatter.

GOLD AND SILVER

The primary trend and secondary trend is bullish, as reported here and here.

SLV has recently made higher closing highs which have been unconfirmed by GLD. Such a lack of confirmation, unless gold confirms soon, might be indicative of an impending secondary (bearish) reaction against the current primary bull market

GOLD AND SILVER MINERS ETFs

The primary and secondary trend is bullish as explained here

On the other hand, SIL’s higher highs have been confirmed by GDX’ higher highs, so technically the primary bull market remains unchallenged.


Sincerely,
The Dow Theorist

Wednesday, April 20, 2016

Dow Theory Update for April 20: Primary bull market signaled by the “classical/Rhea” Dow Theory on April 19th



Gold non confirmation continues


US STOCKS

The primary and secondary trend (as determined by Schannep’s Dow Theory) is bullish, as explained here and here.

Yesterday, April 19th, the Transports broke out above its March 18th, 2016 closing highs (secondary reaction highs), and, hence, according to the “Rhea/classical” Dow Theory (which only uses the Industrials and Transports in order to look for confirmations), a primary bull market was signaled.

By the way, now we have a triple confirmation, which is normally good.

Another observation: Even though I felt terribly bad taking Schannep’s Dow Theory signal some days ago (as I felt a decline was at hand), subsequent price advances have proven that it is not wise to wait out Dow Theory signals. Nobody knows the future, and strength can last longer than expected. Will prices go down in the coming days? Maybe. Who knows. But the takeaway is this: As soon as you see a Dow Theory signal (and you decide to take the trade, as you are not obliged to be batting all the time), act, and don’t wait for a pullback that may not materialize.

Final observation: This specific primary bull market signal proves that in most instances (not all) Schannep’s Dow Theory reacts swifter than the classical one. This applies to both entries and exits (more about it here), which results in outperformance and lower drawdowns.


Here you have an updated chart displaying the two signals (Schannep’s and the “classical/Rhea”)

Four trading days later, the Classical/Rhea Dow Theory signaled a primary bull market

 
GOLD AND SILVER

The primary trend and secondary trend is bullish, as reported here and here.

SLV has recently made higher closing highs which have been unconfirmed by GLD. Such a lack of confirmation, unless gold confirms soon,  might be indicative of an impending secondary (bearish) reaction against the current primary bull market

GOLD AND SILVER MINERS ETFs

The primary and secondary trend is bullish as explained here

On the other hand, SIL’s higher highs have been confirmed by GDX’ higher highs, so technically the primary bull market remains unchallenged.


Sincerely,
The Dow Theorist