Dow Theory Update for Nov 23: Volume not confirming stock market action

Gold and silver escape danger zone

Let’s get started with our Dow Theory commentary for today.

Stocks closed up today. However, according to the Dow Theory, both the primary trend and secondary trend remain bearish. If you are not acquainted with the stock market primary bear market signal, you should read my post on this blog "Dow Theory special issue: After the dust has settled. Weekend commentary to the Dow Theory primary bear market signal" which you can read here.

However, volume, again, refused to confirm the stock’s advance.

As you can see in the chart below today was a bearish volume day again. I know that today was a short trading day. However, what I see in the chart is that volume is not confirming market action. Red arrows and a down trendline confer a bearish inference.

Volume bearish. Look at the diverging trends of price and volume

Gold, silver and their respective miners ETFs closed up. Technically, nothing has changed according to the Dow Theory. The primary trend is bullish whereas the secondary trend is bearish.

It is important to note that gold and silver seem to be escaping the “danger area” of the Nov 2 secondary lows. As you know, a joint violation by gold and silver of the Nov 2 lows would flash a primary bear market signal. Today’s action by making jointly new higher highs (although the highest highs have not been bettered yet), gold and silver are displaying strength. 

Silver continues being the metal showing better relative strength. 

Here you have an updated chart of GLD and SLV.

Gold and silver seem are far from flashing a primary bear market signal

 

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

Data for November 23, 2012
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bear market started		09/14/2012	147.24
Bear market signaled		11/16/2012	136.37
Last close		11/23/2012	141.35
Current stop level: Bull market high			147.24
Price chg since bear mkt signaled	Tot decline since start bear mkt	Max Pot Loss %
3.65%	-4.00%	-7.38%
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		11/23/2012	169.61
Current stop level: Bear mkt low			149.46
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
5.65%	13.48%	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		11/23/2012	32.99
Current stop level: Bear mkt low			25.63
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
14.07%	28.72%	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		11/23/2012	23.38
Current stop level: Bear mkt low			17.08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
7.10%	36.89%	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		11/23/2012	48.74
Current stop level: Bear mkt low			39.56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
2.03%	23.21%	20.75%

Sincerely,

The Dow Theorist.