Dow Theory update for May 20: Gold and silver's colossal outside reversal bar

 Stocks’ rally stalls

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

Stocks

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

Volume was lower than Friday’s, which, once again, has a bullish connotation.

Gold and Silver

Gold and silver closed up. They didn’t only close up, but they did so by means of an outside reversal bar, which is, at bottoms, tends to be the harbinger of a rally of, at least, moderate proportions. However, you know that this Dow Theorist of yours tends to be kind of faithful to the Dow Theory tenets, and, accordingly, I am not in the business of calling either tops or bottoms. I am merely interested (and that’s already a big feat) in spotting changes of trend relatively early with a modicum of competence. Until this happens, and although I am not blind, and I know the meaning of an outside reversal bar, I will not yield to temptation and declare a change of trend (not even of secondary proportions). Such reluctance to deviate from the Dow Theory has paid me well during this secular bear market as you can read here

So, for now, the primary and secondary trend of GLD and SLV is bearish.

GDX and SIL, the gold and silver miners ETF, closed up and by means of a reversal bar too. Let’s see what happens. In the meantime, the primary and secondary trend remains bearish.

Here you have the figures of the markets I monitor for today. As you can read in my May 17, 2013 post “Introducing Schannep’s Stoploss for the stock market”, which you can find here, now we have two alternative stops. One strictly derived from the Dow Theory (primary bear market lows) which currently stands at 7.63%; the other one derived from Dow Theorist Schannep, which stands at a modest -3.99%. Personally, and being fully convinced by the solidity of Schannep’s work, my choice stands at-3.99%.

 

Data for May 20, 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		05/20/2013	166.93
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
14.29%	23.01%	7.63%
Alternative Schannep's stoploss:
Highest closing high		05/17/2014	166.94
16% stoploss from highest closing high			140.23
		Max Pot Loss %
		-3.99%
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