Dow Theory update for Sept 24: Not even a secondary reaction…yet

Today has been a mildly down day. Both the SPY and the Industrials closed down. The Transports, again diverging, closed slightly up for the day.

Since Sept 14 the stock market has been unable to make new highs. However, the decline experienced until now is so mild that even the last minor recorded lows (they don’t even qualify as “reaction lows”, just pure and simple “lows”) of 09/10/2012 have not been broken yet. In other words, under Dow Theory we have not gotten even a tiny “pullback”; much less a secondary correction (for now).

Volume was lower than Friday's which is a bullish sign (on a down day volume should be higher to be bearish). However, the bearish volume surge of Friday is not to be overlooked.

Bottom line: the stock market continue in an unchallenged primary bull market and even the secondary trend remain bullish since the last recorded lows of 09/10/2012 have not been broken.

However, there is a lot of bearishness out there. People mistake “secondary reaction” with bear market and many are claiming that a new “bear market” is in sight when, at most, we are facing a secondary reaction, yet to unfold. In order to assuage our readers, I’ll write a specific post dealing with such bearishness in which I will restate my bullish interpretation of the market. I feel it is needed among such pervasive bearishness.

As to the gold and silver markets and their miners, all of them closed down. However, as with stocks, no minor lows have been broken. Thus, both the primary trend and even the secondary trend remain bullish. The lows I am observing (although they are not “secondary correction” lows and hence its violation doesn’t imply a primary bear market but, at best, a secondary reaction) are the lows made on 09/10 and 09/12.

So time will tell.

Here you have the figures of the markets I follow for today:

 

Data for September 24, 2012
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		09/24/2012	145,65
Current stop level: Bear mkt low			128,1
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
7,02%	13,70%	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		09/24/2012	171,05
Current stop level: Bear mkt low			149,46
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
6,55%	14,45%	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		09/24/2012	32,93
Current stop level: Bear mkt low			25,63
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
13,87%	28,48%	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		09/24/2012	24,45
Current stop level: Bear mkt low			17,08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
12,00%	43,15%	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		09/24/2012	52,96
Current stop level: Bear mkt low			39,56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
10,86%	33,87%	20,75%

 

Sincerely,

The Dow Theorist.