Friday, November 2, 2012

DOW THEORY UPDATE FOR NOV 2: BEARISH DAY



Trends unchanged

It seems that the short term bearish pattern of volume I have been talking about on this Dow Theory blog seems to be winning (short term where it belongs) the upper hand. 

Today the SPY, the Transports and the Industrials closed down. 

However, technically, and more specifically, under Dow Theory, nothing has been accomplished. Nothing has changed. The secondary trend remains bearish, and the primary trend remains bullish.

Volume today, in spite of the violent reversal of prices, was actually lower than yesterday’s which, as you probably know if you are a follower of this Dow Theory blog, is a bullish sign. However, if we put things in perspective, the overall pattern of volume short term remains bearish. 

Today gold, silver and their ETFs miners closed down. Again, technically nothing has changed. The primary trend remains bullish. The secondary trend for gold and silver remains bearish and has been confirmed as GLD and SLV jointly broke last week lows.  Gold has retraced ca. 45% of the primary bull swing. Silver has retraced ca. 48%. So we are dealing now with a standard secondary reaction in terms of retracement. In terms of time this secondary reaction is still relatively young. Since Oct 4 (last recorded joint highs) just one month has elapsed. We know that secondary reaction may well last several months. So, again, patience is demanded. While it can finish overnight, statistically it is possible that the secondary reaction is not finished yet.

Where things get more interesting is in the precious metals' arena. More specifically GLD.  I plan to write later on the weekend a specific post concerning GLD, as it is at a level now that, provided the primary trend holds, may be appropriate for latecomers to establish a position. However, before jumping the gun, some serious thought should be made. This is what I will attempt to do tomorrow.

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

 

Data for November 2, 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
11/02/2012 141,56
Current stop level: Bear mkt low
128,1




Unrlzd gain % Tot advance since start bull mkt Max Pot Loss %




4,01% 10,51% 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
11/02/2012 162,6
Current stop level: Bear mkt low
149,46




Unrlzd gain % Tot advance since start bull mkt Max Pot Loss %




1,28% 8,79% 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
11/02/2012 29,95
Current stop level: Bear mkt low
25,63




Unrlzd gain % Tot advance since start bull mkt Max Pot Loss %




3,56% 16,86% 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
11/02/2012 24,37
Current stop level: Bear mkt low
17,08




Unrlzd gain % Tot advance since start bull mkt Max Pot Loss %




11,64% 42,68% 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
11/02/2012 49,77
Current stop level: Bear mkt low
39,56




Unrlzd gain % Tot advance since start bull mkt Max Pot Loss %




4,19% 25,81% 20,75%


Sincerely,

The Dow Theorist.

3 comments:

  1. Hi Dow Theorist,

    Thank you very much for all your articles.Regarding gold and silver, at what price would you recommend us to start accumulating?
    Thank you very much.

    Cheers,
    Tan

    ReplyDelete
    Replies
    1. Hi Tan,

      Thx for following this Dow Theory blog.

      First of all, I don’t give specific advice. Please read the disclaimer at the bottom (footer) of the blog. This blog is just a way to express thoughts and to have the readership engaged in thinking. However, the specific decisions depend exclusively on the reader.

      Having said this, later today I will post a special Dow Theory issue concerning gold which you may find interesting.
      Sincerely,

      The Dow Theorist

      Delete
  2. Hi Dow Theorist,
    Thanks for the reply.

    Cheers,
    Tan

    ReplyDelete