Dow Theory update for Sept 11. S&P, Gold and Silver: Both primary and secondary movement bullish.

The breather the market took yesterday was short lived. Today the S&P and all the precious metals universe I monitor were up for the day. However, as per Dow Theory we should disregard the daily movement. Yesterdays down move didn’t make me jittery and today’s up move doesn’t make me jump at all.

From a Dow Theory perspective, we see that the Industrials have made a new high (13,323.36) while the Transports and the S&P, albeit up, failed to make new highs. The Industrials have, thus, bettered their highest high 13,306.64 made last Friday September 7^th. One day without either the SPY or the Transports confirming conveys no information under Dow Theory. If the lack of confirmation should turn “persistent”, then the market might be hinting the onset of a secondary reaction. However, we are very far from that yet.

Volume, while always of secondary importance, especially, when day-to-day comparisons are made, seems mildly bullish in that yesterday’s volume (down day) was lower than today’s volume (a high day).

All in all, both the primary trend (which is supposed to last on average longer –or much longer- than one year) and the secondary trend are both bullish and show under Dow Theory no signs of tiring.

Finally, we have to keep an eye on the Transports which are getting closer and closer to the previous secondary highs and are making higher lows since 07/25/2012. We will watch it like a hawk.

This chart gives you and updated view of what the three stock indices are doing under Dow Theory:

No change in primary and secondary trend as per Dow Theory

Well, now let’s turn to gold, silver and their miners. The day was up across the precious metals universe. Under Dow Theory nothing has changed. The last recorded highs of September 7 have not been broken. Both the primary and secondary movements are bullish.

At the bottom of this post, you will find the tables that contain all the relevant figures. There you can monitor:

1.      The unrealized gain made since taking the “buy” Dow Theory signal.

2.      The total gain made by the market since the inception of the new primary bull market.

3. The total loss we are likely to suffer in case the market reverses. Such loss is determined by the “Dow Theory stop”. To know more about the vital Dow Theory stop to protect your capital, please read my post “Why Dow Theory matters: Outstanding Risk Reward Ratio thanks to the Dow Theory’s trailing stop”, which you can find here

As I wrote yesterday, the best Risk Reward Ratio (RRR) as per Dow Theory was found in both the SPY and GLD. The other markets (i.e. the miners) didn’t present such compelling Dow Theory stops.

Sincerely,

The Dow Theorist

 

DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		06/04/2012	128.1
Bull market signaled		06/29/2012	136.1
Last close		09/10/2012	143.91
Current stop level: Bear mkt low			128.1
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
5.74%	12.34%	6.25%
DOW THEORY PRIMARY TREND MONITOR GOLD (GLD)
			GLD
Bull market started		05/16/2012	149.46
Bull market signaled		08/22/2012	160.54
Last close		09/10/2012	167.9
Current stop level: Bear mkt low			149.46
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
4.58%	12.34%	7.41%
DOW THEORY PRIMARY TREND MONITOR SILVER (SLV)
			SLV
Bull market started		06/28/2012	25.63
Bull market signaled		08/22/2012	28.92
Last close		09/10/2012	32.41
Current stop level: Bear mkt low			25.63
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
12.07%	26.45%	12.84%
DOW THEORY PRIMARY TREND MONITOR ETF SIL
			SIL
Bull market started		07/24/2012	17.08
Bull market signaled		09/04/2012	21.83
Last close		09/10/2012	22.78
Current stop level: Bear mkt low			17.08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
4.35%	33.37%	27.81%
DOW THEORY PRIMARY TREND MONITOR ETF GDX
			GDX
Bull market started		05/16/2012	39.56
Bull market signaled		09/04/2012	47.77
Last close		09/10/2012	49.7
Current stop level: Bear mkt low			39.56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
4.04%	25.63%	20.75%