Wednesday, September 12, 2012

Dow Theory update for Sept 12. S&P, Gold and Silver: Both primary and secondary movement bullish

Today, again the three stock indices I monitor under Dow Theory closed up for the day. The Industrials and the SPY made higher highs. Actually we are at the highest point for both indices since the inception of this primary bull market on June 4 (signaled by the Dow Theory on June 29).

The transports also closed higher providing triple confirmation. While the transports still have to better its previous secondary reaction high (see chart below) at 5194.38, today’s close at 5174.18 puts the Transports very close to a bullish breakout. Such breakout would be very relevant under Dow Theory, since it would provide the so much awaited confirmation of the Transports.

However, I’d like to note that this primary bull market “leg” statistically is becoming “old”. Please mind I say “old” and not “tired”, since the market is not providing any hint as to an impending secondary reaction. But based on statistics more than three months have passed without experiencing a secondary reaction, and, hence, one might be in store for us soon. The market will tell.

Volume has been bullish in the last 3 days. Decreasing in declines and expanding in advances. However, as I always write, volume is always of secondary importance.

Here you have an updated chart of the stock indices. Please pay close attention to the transports.

New Higher highs confirm both the primary and secondary trend under Dow Theory.  Keep an eye on the Transports
As to the gold, silver and their miners, no news yet. SLV and SIL closed slightly lowers whereas GLD and GDX  closed slightly higher. From a Dow Theory perspective nothing has changed. What we see in the charts is that all the precious metals universe has been 4 days consolidating. The breakup (down) can be in any direction, although the odds favor a continuation of the main trend under Dow Theory.

Below you can find all the relevant figures under Dow Theory. Click in the image to expand its view.

 And that’s all for today. Tomorrow the market will tell.


The Dow Theorist

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