Dow Theory Update for Jan 31: Is a secondary reaction starting?

 Precious metals continue weak.

Let’s see what the Dow Theory has in store for us today.

The Transports closed up. The SPY and Transports closed down.

By the way, Schannep of, “thedowtheory.com”, has been again been vindicated. In September 2012, he recommended buying the Transports when they were, according to the mainstream, in their death throws. Schannep’s call was echoed in this Dow Theory blog in this post. Schannep advised his subscribers to buy the Transports when they were close to  Now they are at 5804, for a gain of ca. 16%  little more than 4 months and clearly outperforming the SPY and the Industrials.

The primary and secondary trend of the stock market remains bullish.

Today’s volume was notably higher than yesterday’s making it a bearish volume day. Declaiming prices were joined by advancing volume. Little by little the short term pattern of volume seems to be deteriorating.

Gold (GLD) and silver (SLV) closed down. I am happy I didn’t jump the gun during the last rally in order to proclaim prematurely the secondary trend as bullish. Since we all are weak, I felt the temptation to twist just a little bit the Dow Theory rules and let my fundamentally based bullish bias be assuaged by technical action. However, and here lies the beauty of technical analysis (and more especially the Dow Theory), I knew that technically the rally we were seeing was not enough to change the secondary trend from bearish to bullish. I had the courage to stick to the technical rules. Furthermore, it would have been stupid to let my fundamentally-based outlook for gold cloud my technical judgment, since by definition, fundamentally based scenarios tend to play out along the secular trend and hence in the shorter term (here I mean less than one year) anything can happen and, thus, the technical structure of the market prevails. 

Here you can see how I struggled with myself and how I objectively applied the Dow Theory to refuse to label the secondary trend as bullish. It is a good exercise of tenacity versus wishful thinking.

 

All in all, the primary and secondary trend for gold and silver remains bearish until proven otherwise.

As to SIL and GDX (the gold and silver miners ETFs) more bearish action. Both closed down. The primary and secondary trend remains bearish.

I am having some computer issues. Later I will post the figures of the markets I monitor for today.

Sincerely,

The Dow Theorist

Dow Theory Update for Jan 30: Stocks finally down. No changes in trends

 Something unpleasant may be happening to the USD and Bonds

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

The SPY, Industrials and Transports closed down today. The primary and secondary trend remains bullish.

Today’s volume was lower than yesterday’s. Since it was a down day, it has a bullish connotation since lower prices were not supported by volume. The overall pattern of volume remains bullish.

Gold (GLD) and silver (SLV) closed up. Yesterday I wrote that the BLV/GLD ratio was turning bearish. Today the ratio has fallen out of bed. See below an updated chart of the BLV/GLD ratio (the red line is the ratio, and the green horizontal line are the last secondary reaction lows of the ratio which were violated yesterday). When I find some free time (always in very short supply), I will write more about the implications of a falling ratio for gold, stocks, bonds themselves and the US dollar. In the meantime, you may get a glimpse of it by reading this post.

Bonds are turning bearish. Now turning weaker than an already weak gold

The primary and secondary trend remains bearish.

SIL closed unchanged. GDX closed down. The miners look unable to rally even in the presence of falling bonds and rising gold.

The primary and secondary trend remains bearish.

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

Data for January 30, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		11/15/2012	135.7
Bull market signaled		01/02/2013	146.06
Last close		01/30/2013	150.07
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
2.75%	10.59%	7.63%
DOW THEORY PRIMARY TREND MONITOR GOLD (GLD)
			GLD
Bull market started		05/16/2012	149.46
Bull market signaled		08/22/2012	160.54
Exit December 20		12/20/2012	161.16
Current stop level: Sec React low		11/02/2012	162.6
Realized Loss %	Tot advance since start bull mkt
0.39%	7.83%
DOW THEORY PRIMARY TREND MONITOR SILVER (SLV)
			SLV
Bull market started		06/28/2012	25.63
Bull market signaled		08/22/2012	28.92
Exit December 20		12/20/2012	29
Current stop level: Sec React low		11/02/2012	29.95
Realized gain %	Tot advance since start bull mkt
0.28%	13.15%
DOW THEORY PRIMARY TREND MONITOR ETF SIL
			SIL
Bull market started		07/24/2012	17.08
Bull market signaled		09/04/2012	21.83
Exit January 23		01/24/2013	21.69
Current stop level: Sec React low		11/15/2012	21.87
Realized Loss %	Tot advance since start bull mkt
-0.64%	26.99%
DOW THEORY PRIMARY TREND MONITOR ETF GDX
			GDX
Bull market started		05/16/2012	39.56
Bull market signaled		09/04/2012	47.77
Exit January 23		01/24/2013	44.56
Current stop level: Sec React low		12/05/2012	45.35
Realized Loss %	Tot advance since start bull mkt
-6.72%	12.64%

Sincerely,

The Dow Theorist

Dow Theory Update for Jan 29: Precious metals decline arrested?

 Stocks losing momentum

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

The SPY and Industrials closed up, thereby making higher highs. The Transports slightly down. The primary and secondary trend remains bullish.

Volume was higher than yesterday’s. Since it was an “up” day, volume supported advancing prices, which is bullish.

Gold (GLD) and silver (SLV) closed up. Is the meltdown being arrested? Keep an eye on long-term bonds and their relative strength with gold (look at the chart below). Today the ratio has turned bearish, which denotes stronger gold and weaker bonds.  In the coming days, I will write an update about the vital BLV/GLD ratio.

The BLV/GLD ratio is turning bearish. Is bond's weakness to slow down gold's decline? Or will higher interests extend the current primary bear market in gold?

 

The primary and secondary trend remains bearish.

As to SIL and GDX, they closed up. The primary and secondary trend remains bearish.

Here you have the figures of the markets I monitor for today. Please observe that I am only updating the figures for the SPY, since I assume that no positions exist currently for GLD, SLV, GDX and SIL given their present bearish primary trends.

 

Data for January 29, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		11/15/2012	135.7
Bull market signaled		01/02/2013	146.06
Last close		01/29/2013	150.66
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3.15%	11.02%	7.63%
DOW THEORY PRIMARY TREND MONITOR GOLD (GLD)
			GLD
Bull market started		05/16/2012	149.46
Bull market signaled		08/22/2012	160.54
Exit December 20		12/20/2012	161.16
Current stop level: Sec React low		11/02/2012	162.6
Realized Loss %	Tot advance since start bull mkt
0.39%	7.83%
DOW THEORY PRIMARY TREND MONITOR SILVER (SLV)
			SLV
Bull market started		06/28/2012	25.63
Bull market signaled		08/22/2012	28.92
Exit December 20		12/20/2012	29
Current stop level: Sec React low		11/02/2012	29.95
Realized gain %	Tot advance since start bull mkt
0.28%	13.15%
DOW THEORY PRIMARY TREND MONITOR ETF SIL
			SIL
Bull market started		07/24/2012	17.08
Bull market signaled		09/04/2012	21.83
Exit January 23		01/24/2013	21.69
Current stop level: Sec React low		11/15/2012	21.87
Realized Loss %	Tot advance since start bull mkt
-0.64%	26.99%
DOW THEORY PRIMARY TREND MONITOR ETF GDX
			GDX
Bull market started		05/16/2012	39.56
Bull market signaled		09/04/2012	47.77
Exit January 23		01/24/2013	44.56
Current stop level: Sec React low		12/05/2012	45.35
Realized Loss %	Tot advance since start bull mkt
-6.72%	12.64%

Sincerely,

The Dow Theorist

Dow Theory Update for Jan 28: Precious metals meltdown unabated

 Stocks hold its ground.

Today is going to be a short post.

Stocks closed mixed. The SPY and Industrials closed slightly down. The Transports slightly up. The primary and secondary trend remains bullish.

Volume was lower tan last Friday’s. Since the SPY closed down, this is a bullish sign.

Gold and silver (GLD and SLV) closed down.  The primary and secondary trend remains bearish. 

Gold and silver miners ETFs (GDX and SIL) closed down. The primary and secondary trend remains bearish.

Tomorrow I’ll have more time to provide you with a more extensive post.

Until then,

Sincerely,

The Dow Theorist