Dow Theory Update for April 10: Stocks make higher highs

No changes in trends

The GLD inventory conundrum solved? Read Fofoa’s latest post

It is no secret that when it comes to “fundamentals” about gold, I am an ardent follower of FOFOA. While this is a technical, Dow Theory blog, I know deep in my heart that when it comes to investing for the very long pull, “fundamentals” prevail over technical considerations. It is just a question of investment horizon. If our perspective is secular, then we'd better be right in our fundamental assessments, as neither the Dow Theory nor any technical devise will be of much help. As I wrote here:

 “I feel a “fundamental'” view is relevant even for technical hardliners. What good is technical analysis or the Dow Theory if, as it is suggested in the interview, your wealth risks being wiped out be it through inflation (USD solution to debt problems) or through punitive wealth taxes that amount to confiscation (EUR solution).

Thus, the Dow Theory is not lying in a vacuum. The Dow Theory and technical analysis are just a means (a very good one, in my opinion) to protect wealth in tough times and gain a modest outperformance of ca. 2%. However, the technical investor should pay attention to much broader issues such as inflation, punitive taxes, the role of gold, etc.”

When it comes to physical gold (not just GLD) my time horizon is secular, and accordingly, I attach importance to fundamentals. Therefore, I pay lots of attention to the “fundamental” musings uttered by Fofoa as far as physical gold is concerned. His latest piece about GLD’s inventory losses is a must-read. As you can guess, Fofoa doesn’t necessarily derive a bearish reading from GLD’s pukes, quite the contrary. You can visit his blog by clicking here.

Zero Hedge seems to agree with Fofoa’s tenets and reports that Central Banks have been buying gold hand over fist. Hence, in spite of declining prices those “in the know” have been hoarding gold.

 

Yesterday, once again, GLD puked almost 5 tons. The bleeding continues.

Stocks

The SPY, Industrials and Transports closed up. The SPY made higher highs thus confirming the Industrials. The primary and secondary trend of the market remains bullish.

Today’s volume was higher than yesterday, which makes it a bullish volume day. Furthermore, today’s high was made on higher volume than the last recorded one on 04/02/2013. Hence, today’s high is a bullish volume pivot point. Thus, volume patterns are becoming less bearish. Here you have an updated chart showing the today's bullish pivot high.

Volume is becoming less bearish

Gold and silver.

GLD and SLV closed down. The primary and secondary trend remains bearish.

GDX and SIL, the gold and silver miners ETF, closed down. The primary and secondary trend remains bearish.

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

 

Data for April 10, 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		04/10/2013	158.67
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
8.63%	16.93%	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.