Dow Theory Update for Dec 3: Stocks under secondary reaction

Stocks down. Gold and silver up.

Let’s analyze the markets under the prism of the Dow Theory.

The SPY, the Industrials and the Transports closed down today. The secondary trend has turned bullish, which means that the current rally now qualifies as a secondary reaction against the primary bearish trend.  Since the lows of 11/15/2012 (11/16/2012) eleven trading days have elapsed. As you know, for a secondary reaction to exist, it is necessary to have a rally (in a bear market)  or a pullback (in a bull market) of at least 10 days. A second requirement is that the movement against the primary trend should have an extent in at least two indices of at least 3%.  Both requirements have been met. Stay tuned as soon I will post a special issue on this Dow Theory blog concerning the details of the current secondary reaction. It goes without saying that the primary trend of stocks remains bearish.

Today’s volume was lower than yesterday’s, since today was a down day, it has a bullish implication.  Since the current rally started we have had only 3 volume bullish days.  So overall the patter of volume is bearish.

As to gold and silver, both closed up today. The primary trend remains bullish and the secondary trend bearish.

SIL and GDX, the gold and silver miners ETFs, closed down today. Technically, nothing changed. The primary trend remains bullish, and the secondary trend remains bearish.

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

 

Data for December 3, 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		12/03/2012	141,45
Current stop level: Bull market high			147,24
Price chg since bear mkt signaled	Tot decline since start bear mkt	Max Pot Loss %
3,73%	-3,93%	-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		12/03/2012	166,13
Current stop level: Sec React low		11/02/2012	162,6
Unrlzd gain %	Tot advance since start bull mkt	Min Pot Gain %
3,48%	11,15%	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		12/03/2012	32,52
Current stop level: Sec React low		11/02/2012	29,95
Unrlzd gain %	Tot advance since start bull mkt	Min Pot Gain %
12,45%	26,88%	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		12/03/2012	22,58
Current stop level: Bear mkt low			17,08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3,44%	32,20%	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		12/03/2012	46,48
Current stop level: Bear mkt low			39,56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
-2,70%	17,49%	20,75%

Sincerely,

The Dow Theorist.