Deflationary day for stocks and precious metals
Let’s get started with our Dow Theory commentary for
today on this blog.
US stocks
The SPY, Industrials and
Transports closed down.
The primary trend was
reconfirmed as bullish on October 17th, for the reasons given here.
Today’s volume was higher than
yesterday’s, which is bearish, as lower prices were met by stronger volume. I
consider volume to be bearish for the reasons given here and here. Furthermore, the
trendline of volume of the last few days is ominously bearish, as volume has
steadily contracted as prices advanced and has expanded as prices declined.
Gold and Silver
SLV and GLD closed down. For
the reasons I explained here,
and more recently 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 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 | 10/31/2013 | 175.79 | |
Current stop level: Secondary reaction low | 165.48 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
4.10% | 11.93% | 2.05% |
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 | 10/31/2013 | 12.91 | |
Current stop level: Primary bear mkt low | 06/26/2013 | 10.59 | |
Unrealized gain % | Tot advance since start bull mkt | Max Pot Loss % | |
-15.95% | 21.91% | 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 | 10/31/2013 | 25.1 | |
Current stop level: Primary bear mkt low | 06/26/2013 | 22.22 | |
Unrealized gain % | Tot advance since start bull mkt | Max Pot Loss % | |
-12.54% | 12.96% | 29.16% |
Sincerely,
The Dow Theorist
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