Dow Theory update for Sept 27: Bull markets don’t die easily

Gold and Silver on the verge of breaking out prior highs

Today all markets I monitor closed up. What else can I say? The primary bull market remains intact and the long awaited secondary correction (which would be a good opportunity for latecomers to be long stocks and precious metals as you can read here) fails to gain traction.

Primary bull markets normally die of old age and ours is still a young one (started on June 4 and was signaled by the Dow Theory  on June 29). If you are new to this blog, you can find more details as to the primary bull market signal for stocks here

Market action has been quite impressive since all the stock indices I monitor as well as gold, silver and their miners closed up. Such breath is usually a bullish sign.

The only bearish shadow on this bullish landscape was volume. NYSE volume was today lower. Since today was an up day, this has bearish implications short term. Hence, we have had 3 bearish volume days in the last 5 days. We should not forget that last Friday’s was a monster volume day, thereby having more bearish importance. So the patter of volume continues to deteriorate short term. Here you have an updated chart of the SPY and volume. The red arrows depict a bearish volume day and the blue arrows a bullish volume day.

As per Dow Theory volume is slightly becoming bearish short term

 The precious metals universe closed up for the day. No exceptions. Also a bullish sign short term. Gold and silver are within striking distance of breaking above the highs registered on 09/21/2012. If this happens, under Dow Theory, it clearly confirms the continuation of the primary bull market that was first signaled on August 22.

All in all: Latecomers should still stay in the sidelines until the markets give us a decent secondary reaction.

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

Data for September 27, 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 06/27/2012 144,68 Current stop level: Bear mkt low 128,1 Unrlzd gain % Tot advance since start bull mkt Max Pot Loss % 6,30% 12,94% 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 06/27/2012 172,34 Current stop level: Bear mkt low 149,46 Unrlzd gain % Tot advance since start bull mkt Max Pot Loss % 7,35% 15,31% 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 06/27/2012 33,58 Current stop level: Bear mkt low 25,63 Unrlzd gain % Tot advance since start bull mkt Max Pot Loss % 16.11% 31.02% 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 06/27/2012 25,07 Current stop level: Bear mkt low 17,08 Unrlzd gain % Tot advance since start bull mkt Max Pot Loss % 14,84% 46,78% 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 06/27/2012 53,89 Current stop level: Bear mkt low 39,56 Unrlzd gain % Tot advance since start bull mkt Max Pot Loss % 12,81% 36,22% 20,75%

Sincerely, The Dow Theorist