Primary trend bullish and
secondary trend bearish in stocks and precious metals.
Let’s get started with our Dow
Theory analysis for today in this blog.
The Industrials and the SPY
closed minimally up today. The Transports taking a breather closed down
today. Technically, nothing has changed.
We know that trends are made
by sheer price action, and that volume merely serves to qualify them. Bearing
this in mind, I’d like to say what follows about volume.
Today’s volume was lower than
Friday’s. Since the SPY was up, this makes a bearish volume day. The up
movement was not supported by expanding volume. So we have had three bearish
volume days in a row.
Today I conduct an alternative
volume analysis. One based on volume at significant pivot points. I am indebted
to L.A. Little
for his insights into this matter. While no strict Dow Theory, Little’s
insights concerning volume are worth considering.
I have put additional arrows
in those pivot days. The lower arrow is the arrow you are already used to see:
bearish or bullish volume day. The arrow on top represents the volume
indication derived at those pivot points. Let’s get started.
The first low in this
correction was made on 09/26/2012. Volume at this low was higher than the
volume made on the preceding pivot low of 09/10/2012. This has a bearish
implication (short term) since the downward movement in the new pivot was
stronger. This is why I placed a red arrow.
From that point, the market
went up until 10/05/2012. At this pivot high, volume was much lower than at the
preceding pivot high of 09/14/2012. This accounts for the red arrow. A second
bearish sign.
On 10/12/2012 we see a new
pivot low. Volume was lower than the volume of the prior pivot low of 09/26/2012.
This is a bullish sign, so I placed a blue arrow.
The last pivot high was made
on 10/17/2012. Volume on that day was higher than the volume made at the
preceding pivot high 10/05/2012. So I placed a blue arrow.
As to the latest low made last
Friday, it is too early to tell. If today had been a down day, then I
could infer more definite conclusions.
However, we can infer the
following conclusions:
The first two pivots were
bearish.
The last two pivots were
bullish.
So whereas the overall reading
is neutral, the sequence of the pivots seems to show that pattern of volume is
becoming bullish. Furthermore, the high reading of volume of last Friday 10/19/2012
could well be the final exhaustion volume burst. Pity that today was not a down
day! I could have derived more definite conclusions.
Bottom line:
Long term volume is bullish,
since volume went up along with the primary upswing until 09/14/2012.
Volume during the secondary
reaction has been mixed. But volume at pivots seems to suggest that the secondary
reaction may be nearing its end.
However, I insist volume may
serve to increase our accuracy on the margin. Price action is king.
Here you have an updated
chart:
![]() |
Volume in pivots: slightly bullish |
Gold, silver and their
respective miners ETFs all of them closed up. Technically, there is no change.
The secondary trend remains bearish and the primary trend bullish.
Here you have the figures for
the markets I monitor.
Data for October 22, 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 | 10/22/2012 | 143.41 | |
Current stop level: Bear mkt low | 128.1 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
5.37% | 11.95% | 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 | 10/22/2012 | 167.58 | |
Current stop level: Bear mkt low | 149.46 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
4.39% | 12.12% | 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 | 10/22/2012 | 31.39 | |
Current stop level: Bear mkt low | 25.63 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
8.54% | 22.47% | 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 | 10/22/2012 | 24.95 | |
Current stop level: Bear mkt low | 17.08 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
14.29% | 46.08% | 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 | 10/22/2012 | 52.43 | |
Current stop level: Bear mkt low | 39.56 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
9.76% | 32.53% | 20.75% |
Sincerely,
The Dow Theorist.
Disclaimer: Dow Theory Investment and its author is not a financial adviser. Dow Theory Investment and its author does not offer recommendations or personal investment advice to any specific person for any particular purpose. Please consult your own investment adviser and do your own due diligence before making any investment decisions. Please read the full disclaimer at the bottom of the footer of this blog.
Disclaimer: Dow Theory Investment and its author is not a financial adviser. Dow Theory Investment and its author does not offer recommendations or personal investment advice to any specific person for any particular purpose. Please consult your own investment adviser and do your own due diligence before making any investment decisions. Please read the full disclaimer at the bottom of the footer of this blog.
No comments:
Post a Comment