Stocks close down
More in-depth analysis of the Dow Theory
Later today, I will post the next issue of the saga "Face off: Schannep versus "classical" Dow Theory", whose first part can be found here.
Zero Hedge sheds some light on the physical gold situation.
Here you can find an interesting article concerning physical gold and the lack thereof.
As with any “fundamental” analysis, it is to be taken with a grain of salt or two. More specifically;
a) Don’t forget that fundamentally based scenarios take time to play out.
b) Not all gold was created equal, as was explained here.
The SPY, Industrials and Transports closed down.
Today’s volume was lower than yesterday’s. Since stocks closed down, contracting volume has a bullish connotation. For the reasons I gave yesterday, I’d say that volume is turning bullish. We have had three 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 closed up. 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 and GDX are nearing the critical secondary reaction highs (blue rectangle and blue horizontal lines). If prices broke up above the blue horizontal lines, a primary bull market signal would be flashed by the Dow Theory. That would be the first really positive technical development in many months for the beleaguered precious metals' sector. Here you have an updated chart. However, until such breakup occurs, we are bound to qualify the primary trend as bearish, come rain or shine.
|Silver and gold miners ETFs close to flashing 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
|Bull market signaled
|Current stop level: Bear mkt low
|Unrlzd gain %
|Tot advance since start bull mkt
|Max Pot Loss %
The Dow Theorist