Dow Theory Update for Dec 17: Stocks up. No change in trends

 Gold and silver indecisive

 

Let’s review the state of the stock market under the prism of the Dow Theory.

The SPY, Transports and the Industrials closed up. Technically, nothing has been accomplished. However, if this rally continues and the highest highs hitherto made are jointly bettered by at least two indices, then a primary bull market signal would be signaled. Which are the highs to keep an eye on?

	Date High	Price (close)
SPY	09/14/2012	147.24
TRANPORTS	06/19/2012	5250.54
INDUSTRIALS	10/05/2012	13610.15

As you can see in the table above, the highs to track are the latest highs made by each index prior to the onset of the first primary bear market leg.

There are three ways a primary bull (bear) market can be signaled. The most typical and frequent patter (for a bull market) is one of a primary bear market leg (as the one we have just had), a rally off the lows (as the current one) and pullback that fails to break jointly the prior lows and a subsequent rally breaking above the last rally highs.

However, Rhea wrote about two alternative ways of signaling a new primary bull (bear) market. One of these "alternative" signals is the one I am referring in this post in this Dow Theory blog. When the highest highs hitherto made are jointly broken out, we can talk of a new primary bull market. In a future post, I will develop further the three signals that, independently, may signal the onset of a new bull market. This would be an important post, since this vital aspect of the Dow Theory is not so easy to unearth from Rhea’s writings.

Volume today was higher than Friday’s. Since stocks were up, it has a bullish connotation.

Technically, and under Dow Theory, the primary trend for stocks remains bearish and the secondary trend bullish.

As to gold and silver both closed up today. Technically, nothing has changed. The primary trend remains bullish and the secondary trend bearish.

GDX closed up, and SIL closed down. Technically, nothing has changed. The primary trend remains bullish and the secondary trend bearish.

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

Data for December 17, 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		12/17/2012	143.77
Current stop level: Bull market high			147.24
Price chg since bear mkt signaled	Tot decline since start bear mkt	Max Pot Loss %
5.43%	-2.36%	-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		12/17/2012	164.44
Current stop level: Sec React low		11/02/2012	162.6
Unrlzd gain %	Tot advance since start bull mkt	Min Pot Gain %
2.43%	10.02%	1.28%
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		12/17/2012	31.2
Current stop level: Sec React low		11/02/2012	29.95
Unrlzd gain %	Tot advance since start bull mkt	Min Pot Gain %
7.88%	21.73%	3.56%
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		12/17/2012	23.08
Current stop level: Bear mkt low			17.08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
5.73%	35.13%	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		12/17/2012	46.51
Current stop level: Bear mkt low			39.56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
-2.64%	17.57%	20.75%

Sincerely,

The Dow Theorist