Dow Theory Update for September 23: Deflationary day

 

No change in trends.

Last weekend I posted this article which makes clear the beauty of the Dow Theory at keeping drawdowns and losses under control. You can read it here.

US Stocks

The SPY, the Industrials and the Transports closed down.

The primary trend is bullish, as explained here, and more in-depth here.

The secondary trend is also bullish for the reasons explained here.

Today’s volume was substantially lower than Friday’s, which is bullish, as lower prices were not joined by expanding volume. I still see the overall pattern of volume as neutral, as I explained here.

Gold and Silver

SLV and GLD closed down. For the reasons I explained here, I feel the primary trend remains bearish. Here I analyzed the primary bear market signal given on December 20, 2012. The primary trend was reconfirmed bearish, as explained here. The secondary trend is bullish (secondary reaction against the primary bearish trend), as explained here.

Here, I explained that GLD and SLV set up for a primary bull market signal. However, a setup is not the same as the “real thing," namely the primary bull market; thus, many “setups” do not materialize and until the secondary reaction closing highs are jointly broken up, no primary bull market will be signaled.

SIL and GDX closed down. SIL and GDX, unlike GLD and SLV, are unambiguously in a primary bull market under the Dow Theory, as explained here and here.

The secondary trend is bearish, which is tantamount to saying that there is an ongoing secondary reaction against the primary bullish trend, for the reasons given here.

Here you have the figures for the SPY, GDX and SIL which represents the only markets with suggested open long positions.

 

DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		06/24/2013	157.06
Bull market signaled		07/18/2013	168.87
Last close		09/23/2013	169.93
Current stop level: Secondary reaction low			163.33
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
0.63%	8.19%	3.39%

 

DOW THEORY PRIMARY TREND MONITOR ETF SIL
			SIL
Bull market started		06/26/2013	10.59
Bull market signaled		08/14/2013	15.36
Last close		09/23/2013	13.48
Current stop level: Primary bear mkt low		06/26/2013	10.59
Unrealized gain %	Tot advance since start bull mkt	Max Pot Loss %
-12.24%	27.29%	45.04%
DOW THEORY PRIMARY TREND MONITOR ETF GDX
			GDX
Bull market started		06/26/2013	22.22
Bull market signaled		08/14/2013	28.7
Last close		09/23/2013	25.17
Current stop level: Primary bear mkt low		06/26/2013	22.22
Unrealized gain %	Tot advance since start bull mkt	Max Pot Loss %
-12.30%	13.28%	29.16%

Sincerely,

The Dow Theorist