Dow Theory Update for Oct 25: No changes.

Today was a technically dull day.

 Let's get started with our Dow Theory analysis for today.

Stocks were up. Technically, nothing significant occurred. It seems as stocks are trying to bottom, but it is too early too tell and we are unconcerned since we do not trade secondary reactions but, as I always say, we “use” them. Later today, I will post a new article in this Dow Theory blog concerning bonds and gold in which you’ll see how we use secondary reactions to define technically significant points.

The Transports, in spite of yesterday's decline, still look the strongest when we look at price action since 09/26/2012. 

 

Volume was higher today, which is bullish, since it was an up day confirmed by rising volume. So the last two days have seen bullish volume. Still too early to tell. However, I have adjusted the last pivot low, which, after yesterday’s and today’s action is the low made on Oct 24 (yesterday). Such pivot is bearish since its volume was higher than that of the preceding pivot low. Here you have an updated chart.

Last pivot low with bearish volume

As to gold, silver and their miners ETFs, all of them closed up for the day. Technically, nothing has changed and I am still dubious as to classifying the ETFs in a secondary reaction. When I look at the SIL chart I see a trading range not a downward movement. Today SIL closed 3.26% up with the close near the highs of the day. Furthermore, SIL lows were made on 09/25/2012, in spite of all the talk of a new “bear market”, price action has been unable to violate such lows Maybe I am the dumbest analyst on earth but this is not bearish action. If things change I change. When I see such lows broken, then I will be clearly saying that the miners are in a secondary reaction.

Bottom line: Another “boring” day, as it should be for any follower of the Dow Theory. There is nothing wrong with that. We are in the business of protecting capital and, with some skill and luck, making money; not in the business of short-term trading.

For stocks, the primary trend remains bullish. The correction seen so far is normal to modest if we judge according to the empirical record.

As to gold and silver: Primary trend bullish and secondary trend bearish.

As to gold and silver miners: Primary trend bullish; silver miners merely consolidating and I am dubious as to label the movement as a secondary reaction.

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

 

Data for October 25, 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		10/25/2012	141.43
Current stop level: Bear mkt low			128.1
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3.92%	10.41%	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		10/25/2012	166.02
Current stop level: Bear mkt low			149.46
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3.41%	11.08%	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		10/25/2012	31.12
Current stop level: Bear mkt low			25.63
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
7.61%	21.42%	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		10/25/2012	24.7
Current stop level: Bear mkt low			17.08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
13.15%	44.61%	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		10/25/2012	51.59
Current stop level: Bear mkt low			39.56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
8.00%	30.41%	20.75%

Sincerely,

The Dow Theorist.