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.