Trends remain unchanged
The
secular bear market is not finished yet
Danielle
Park of the “Juggling Dynamite” blog, echoing Vitaliy Katsenelson, is of the
opinion that the secular bear market in stocks that began in the year 2000 is
far from over. PER and profit margins (and record highs) speak against a new
secular bull market. As a consequence, we should brace ourselves for, at least,
one more cyclical bear market.
From a Dow
Theory perspective or, at least, from a Rhea/Classical Dow Theory perspective,
it is immaterial to us whether we are in a secular bull or bear market, as we
are mainly interested in the cyclical bull and bear markets. Thus, on November24, 2012, I wrote:
I
personally tend to ignore the secular trend and, like Schannep, I feel
comfortable spotting cyclical bull and bear markets. This implies a time frame
of ca. 1-2 years, which is long term enough not to be a short term trader but
short term enough not to be a “buy and hope," sorry, “buy and hold”
investor. The secular trend is important, though: It helps me determine the
total amount of capital to be committed to stocks. In a secular bull market
like the nineties, I'd feel comfortable with an 80% allocation to stocks. Under
a secular bear market, I'd decrease my commitment even under a cyclical bull
market.
Furthermore, my Dow Theory studies show that the investor is able to extract profits (albeit more modestly) from the market even under secular bear markets, as explained here.
Stocks
The SPY, Industrials and Transports closed down. The higher
high made by the Industrials yesterday remains unconfirmed.
Today’s volume was slightly higher than yesterday’s.
Accordingly, it has a bearish connotation as declining prices were confirmed by
stronger volume. The overall pattern of volume is neutral, since, in spite of
some bullish volume days, volume action was clearly bearish on 05/22/2013. Here
you have an updated chart.
Volume is neutral. |
Gold and Silver
GLD and SLV closed up. However, one “up” day is not
enough to change trends. The primary and secondary trend remains bearish.
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 May 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 | 05/29/2013 | 165.27 | |
Current stop level: Bear mkt low | 135.7 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
13.15% | 21.79% | 7.63% | |
Alternative Schannep's stoploss: | |||
Highest closing high | 05/21/2013 | 167.17 | |
16% stoploss from highest closing high | 140.42 | ||
Max Pot Loss % | |||
-3.86% | |||
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
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