Let’s get started with our Dow Theory commentary for today on this blog.
The SPY and Industrials closed down. The transports closed up. Nothing relevant under the Dow Theory.
Today’s volume was lower than Friday’s. Since stocks closed down, contracting volume has a bullish connotation. For the reasons I gave here, I’d say that volume is turning bullish. We have had four consecutive bullish volume days, and the last breakup of 08/01 was a bullish pivot, as was explained here.
Gold and Silver
SLV and GLD gapped up and closed up. SLV bettered its 07/23 closing highs. GLD, in spite of its closing up, refused to confirm.
The primary trend is bearish, as explained here and reconfirmed bearish here. The secondary trend is bullish (secondary reaction against the primary bearish trend), as explained here.
SIL and GDX, the gold and silver miners ETFs, closed up. SIL neatly broke up the 07/23 secondary reaction closing highs. However, GDX refused to confirm. Had GDX broken up its 07/23 highs, a primary bull market would have been signaled. Thus, the failure of GDX to confirm SLV’s higher highs prevents me from qualifying the primary trend as bullish. According to the Dow Theory such a breakup unconfirmed is more often than not deceptive. Furthermore, the longer the non-confirmation persists, the more suspect the ongoing bullish secondary trend will be.
Here you have an updated chart.
|Gold and Silver miners close to signaling primary bull market signal|
The secondary trend for GDX and SIL is bullish, as explained here.
Here you have the figures for the SPY, which represents the only market with a suggested open long position.
|DOW THEORY PRIMARY TREND MONITOR SPY|
|Bull market started||06/24/2013||157.06|
|Bull market signaled||07/18/2013||168.87|
|Current stop level: Bear mkt low||157.06|
|Unrlzd gain %||Tot advance since start bull mkt||Max Pot Loss %|
The Dow Theorist