Dow Theory Update for Oct 26: No changes in trends.

All primary trends remain bullish

There is not much to say in this Dow Theory analysis for today.

The Industrials and Transports closed up. The SPY was mildly down. Technically, nothing has been changed. The primary trend remains bullish and the secondary one bearish.

Since the SPY has much larger capitalization than the Industrials and the Transports, I consider today’s movement as a down movement. Since volume today was larger than yesterday’s, I’d say volume is bearish.

It seems that the markets (especially the SPY) are consolidating. Either the bottom of the secondary reaction is forming or just a rest before the downward thrust resumes.

Gold, silver and their ETFs all closed down today. However, there is no technical change. All primary trends remain bullish.

I continue to keep my eyes glued to the BLV/GLD (long term bond/ gold) ratio. I feel the battle between gold and bonds will give us many clues as to subsequent developments. More on this vital ratio in my post “Dow Theory spells trouble for bonds: Clouds on the horizon. Part II” which you can read here.

 

Today the ratio was slightly up. Long term bonds closed up whereas their kryptonite, gold, closed down. So, for one more day, bonds are dodging the bullet.

Here you have the figures of the markets I monitor. As a reminder, the column “Max Potential Loss” reflect the loss an investor would suffer if, after having bought according to the Dow Theory signals, the markets reverse and hit the Dow Theory stop.

 

 

Data for October 26, 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		10/26/2012	141.35
Current stop level: Bear mkt low			128.1
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3.86%	10.34%	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		10/26/2012	165.93
Current stop level: Bear mkt low			149.46
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3.36%	11.02%	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		10/26/2012	31.08
Current stop level: Bear mkt low			25.63
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
7.47%	21.26%	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		10/26/2012	24.56
Current stop level: Bear mkt low			17.08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
12.51%	43.79%	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		10/26/2012	51.22
Current stop level: Bear mkt low			39.56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
7.22%	29.47%	20.75%

Sincerely,

The Dow Theorist.