Dow Theory Update for March 21: Gold and silver awakening

 Stocks down

 

 Let's get started with our Dow Theory commentary in this blog for today.

An interesting article in The Reformed Broker

Some days ago, The Reformed Broker posted an interesting article differentiating between “good” and “bad” new highs.

 

It suggests that the news highs recently made are “good ones” and will hold.

However, as Business Insider notes, a correction is due:

Nevertheless, a correction is not the same as a primary bear market, thus when we look at the big picture we have:

1)     A primary bull market, which is still young (i.e. less than 2 years).

2)     New highs until very recently, which is always bullish.

3)     New highs of “good quality” as per the article quoted above.

4)     Bull markets that lasted 4 years tend to reach 5 years as explained here.

Thus, while a secondary correction is statistically due, the odds favor that the primary bull market will continue for some time at least.

Stocks

The SPY, Industrials and Transports closed down in unison. The primary and secondary trends remain bullish.

Volume today was smaller than yesterday’s, which makes it a bullish volume day as declining prices were not met by expanding volume. The overall pattern of volume remains bearish and continues to suggest a secondary reaction.

Gold and silver

GLD and SLV closed up. It seems likely (as already anticipated here) that a bottom has been made. However, technically and under Dow Theory it is too soon to call a change in the trend. Until now, both the primary and secondary trend remain bearish.

As to the gold and silver miners ETFs, both GDX and SIL closed up. The primary and secondary trend remains bearish.

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

Data for March 21, 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		03/21/2013	154.36
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
5.68%	13.75%	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	Max Pot Loss %
-0.64%	26.99%	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
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	Max Pot Loss %
-6.72%	12.64%	20.75%

Sincerely,

The Dow Theorist.