No technical changes until now
After our rather dense “Dow
Theory Special Issue” of last Saturday, let’s get started with something
lighter for today.
The SPY and Transports closed
up. The Industrials closed down by a mere -0.23 point.
Since the SPY and the
Transports closed up, I’d say that basically it was an “up” day. However,
volume was dramatically low, which has a bearish connotation.
Technically, nothing has
changed. The primary trend remains bullish and the secondary trend remains
bearish. However, if you have not done so yet, I encourage you to read my post “Is the primary trend for stocks
about to change? which you can read here
Gold and silver closed down
today. I find noteworthy that gold and silver are setting up for a primary bear
market signal. On 10/04/2012, gold and silver jointly made new highs. Since that
date, they retraced the primary bull market advance until 11/02/2012. From that
date, both GLD and SLV staged a rally off the 11/02/2012 secondary reaction
lows. Such rally clearly exceeded 3% for GLD and almost reached 6% for silver. You
know that for stocks the rally following the secondary reaction lows must reach
at least 3% in order to be meaningful. You also know that for gold and silver
I adjust such 3% threshold to their own volatility. Gold has roughly the same
volatility of the SPY and, hence, if no adjustment is made. Silver almost
doubles gold volatility, so I demand ca. 6%.
From their 11/02/2012 lows at 162.60
gold rallied until 11/08/2012 when it reached 167.99. This is a rally of 3.3%.
Silver didn’t quite reach 6% but as you can find here, I only demand
one rally. Furthermore, silver almost confirmed since its rally amounted to
5.3%.
Therefore, if the secondary
reaction lows of 11/02/2012 are broken a primary bear signal under Dow Theory
will be flashed for gold and silver. Here you have an updated chart. The red
line shows the price level to be jointly violated to have a primary bear market
signal.
![]() |
Gold and silver setting up for a primary bear market signal |
The precious metals ETF miners
GDX and SIL closed down. However, there is no technical change to report.
So we have plenty of work to
do in the coming days. We have to keep a close eye on the Transports, GLD and
SLV.
Here you have the figures of
the markets I monitor for today
Data for November 12, 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 | 11/12/2012 | 138.26 | |
Current stop level: Bear mkt low | 128.1 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
1.59% | 7.93% | 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 | 11/12/2012 | 167.45 | |
Current stop level: Bear mkt low | 149.46 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
4.30% | 12.04% | 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 | 11/12/2012 | 31.37 | |
Current stop level: Bear mkt low | 25.63 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
8.47% | 22.40% | 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 | 11/12/2012 | 23.94 | |
Current stop level: Bear mkt low | 17.08 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
9.67% | 40.16% | 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 | 11/12/2012 | 50.04 | |
Current stop level: Bear mkt low | 39.56 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
4.75% | 26.49% | 20.75% |
Sincerely,
The Dow Theorist
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