Strebler, of the Dow Theory Letters, remains cautiously bullish
In recent
“Dow Theory Letters," Jon Strebler, Russell’s associate in the “Dow Theory Letters," has confirmed the bullishness of the stock market, even though
he cautions that, at best, a correction might be in the making. Furthermore,
Strebler seems to be paying attention to the SPY, thereby slightly diverging
from “Rhea/classical” Dow Theory and becoming closer to one of the tenets of
Schannep’s Dow Theory (which includes the S&P as the third index to
monitor). More about the conceptual difference between the “classical” and
“Schannep’s” Dow Theory here. As to
their respective performance, you can go here.
In any instance, I appreciate Strebler’s analysis of the markets, and, to
the best of my knowledge, he has provided more valuable, actionable and
clear-cut advice than his mentor Richard Russell.
US stocks
The
Transports closed up. The Industrials and the SPY closed down. Once again, the
Transports made a new higher closing high, which has been unconfirmed. The
longer this pattern of higher highs by the Transports remains unconfirmed, the
higher the odds of a secondary reaction.
The primary
trend was reconfirmed as bullish on October 17th and November 13th,
for the reasons given here and here.
Gold and
Silver
SLV, and GLD
closed up. 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.
As to the
gold and silver miners ETFs, SIL and GDX closed up. GDX made a higher closing
high unconfirmed by SIL. If this secondary trend is to last, SIL should confirm
soon. I see uncommon strength in the gold and silver miners’ ETFs. This is why,
last Friday January 17th, and in accordance with the Dow Theory, the
secondary trend was labeled as bullish, as explained here.
The primary trend
for SIL and GDX remains, nonetheless, bearish, as was profusely explained here and here.
Here you have
the figures for the SPY which represents the only market with a suggested open
long position:
Data for January 23 , 2014 | |||
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 | 01/23/2014 | 182.79 | |
Current stop level: Secondary reaction low | 165.48 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
8.24% | 16.38% | 2.05% |
Sincerely,
The Dow
Theorist
dow theorist, the transports are coming down hard today looks like a secondary trend is being confirmed today...with vengence.
ReplyDeleteHi Travis,
ReplyDeletetake a look at my Jan 24 post:
http://www.dowtheoryinvestment.com/2014/01/dow-theory-update-for-january-24-stocks.html
There, I explain that we are near the signaling of a secondary reaction but we are not there....yet. If you take classical Dow Theory we are still quite far. If you take Schannep's, the time requirement (8 trading days as the average of all three indices) has not been met. However, I don't like volume readings and so many days of higher highs by the Transports unconfirmed by other indices has been a warning sign....but not there...yet.
Regards.