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
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