Tuesday, November 6, 2012

Dow Theory Update for Nov 6: Bullish parade.




Technically, nothing has changed.
 

If you have been following this Dow Theory blog for some time, it may be dawning on you that investing along the primary trend, as defined per Dow Theory, can be boring. Since June 29, when a Dow Theory primary bull market signal was displayed for stocks, no action has been required from the investor. Of course, for those restless minds hoping to get rich quickly this is much too boring. On the other hand, for those mindful of the impact of trading costs on performance, the Dow Theory (along the primary trend) is the perfect balance between being a buy and hold investor (and being left with the proverbial hot potato in your hand) and getting lost in the frenzy of short-term trading. I am not disparaging short-term trading, but I am well aware that the great majority of short term traders ends up with losses and psychologically burned out. Anything that requires frequent trading should be left in the hands of professionals. 

Furthermore, as you are seeing on this Dow Theory blog on a daily basis, trading sparsely does not mean that you can forget the markets. You have to keep an eye on them daily,  but it is not the same to monitor the markets as to trade them.

Today the SPY, Transports and Industrials closed up for the day. Technically, however, nothing was accomplished and hence the primary trend continues up while the secondary trend continues down.

Today’s volume was higher than yesterday’s. Since it was clearly an up day, we can derive a bullish implication from today’s volume. Little by little seems that the short term pattern of volume is turning neutral (roughly the same number of blue and red arrows). Here you have an updated chart concerning volume. 

Volume turning short term neutral

As to gold, silver and their miners ETFs all of them closed up today. However, technically nothing changed. Gold and silver still caught in a secondary reaction and their ETFs still in no man’s land. The primary trend in the PMs universe remains bullish. 

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


Data for November 6, 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
11/06/2012 142,96
Current stop level: Bear mkt low
128,1




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




5,04% 11,60% 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
11/06/2012 166,3
Current stop level: Bear mkt low
149,46




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




3,59% 11,27% 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
11/06/2012 31,01
Current stop level: Bear mkt low
25,63




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




7,23% 20,99% 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
11/06/2012 24,29
Current stop level: Bear mkt low
17,08




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




11,27% 42,21% 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
11/06/2012 50,37
Current stop level: Bear mkt low
39,56




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




5,44% 27,33% 20,75%




Sincerely,

The Dow Theorist.

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