Category: Dow Theory

Dow Theory Update for April 4th: Did Rhea really tell that secondary reactions had to last three weeks?

posted on: April 4, 2020

A study on the proper appraisal of secondary reactions as taught by Rhea I am re-reading (for 10th, 11th time?) Rhea’s book “The Dow Theory,” and I am unearthing many gems. Those gems relate to the thorny issue of appraising secondary reactions. The proper ascertainment of a secondary reaction is vital. The lows of secondary […]

Dow Theory Update for March 21st: Secular trend for US stocks turned bearish on March 21st, 2020

posted on: March 21, 2020

Primary and secondary trends unchanged for US stocks, US interest rates, precious metals and their ETFs miners unchanged US STOCKS Under Schannep’s Dow Theory The primary trend is bearish since March 9th (penetration of the lows of the current secondary reaction) or even February 25th (alternative exit based on the penetration of the lows of […]

Dow Theory Special Issue: Back to Divergent interpretations of the “classical” Dow Theory (IV)

posted on: March 16, 2020

Primary and secondary trends unchanged for US stocks, precious metals and their miners ETFs and US interest rates When I thought that all was said and done concerning this saga (see here, here and here). Once again, I feel that some remarks concerning what I consider to be a quite “nonreactive” interpretation of the […]

Dow Theory Special Issue: Some introspection. Let’s go back to the basics in order to make the next leap forward (II)

posted on: March 7, 2020

Comparing Schannep’s Dow Theory to 21 years of buy and hold As I wrote in my last post, there are many projects expanding the Dow Theory in the pipeline. However, before we embark upon discovering new uses for the Dow Theory, we’d better remain on solid ground. To this end, we are going to compare […]

Dow Theory Special Issue: Some introspection. Let’s go back to the basics in order to make the next leap forward (I)

posted on: February 15, 2020

Musings, and more musings before the meat This is a long post which has been divided into two. It has really taken lots of introspection, as it crystallized when being alone in the countryside enjoying the sights of some wonderful lush hills dotted with grazing cattle. This post is a roadmap for the future tasks […]

Dow Theory Special Issue: Hamilton’s insight that the Dow Theory may be applied to many markets seems to be right (II)

posted on: December 14, 2019

Applying the Dow Theory to oil markets while exploring the short side. Towards building a Dow Theory portfolio In the first post of this new Hamilton saga, I applied the Dow Theory to the oil sector. I took the pair formed by USO (crude oil) and XLE (oil stocks) ETFs. I analyzed the “long” […]

Dow Theory Special Issue: Hamilton’s insight that the Dow Theory may be applied to many markets seems to be right

posted on: December 6, 2019

Applying the Dow Theory to oil markets and towards building a Dow Theory portfolio Hamilton was Charles Dow understudy, and writer of the book “The Stock Market Barometer” As I have written here, Hamilton was of the opinion that the Dow Theory may be applied to other markets. Based on that insight, when I started […]

Dow Theory Special Issue: Capitulation. The ultimate bottom indicator (VI)

posted on: November 16, 2019

When and how much to buy. Transitioning from a 25% to a fully invested position As a reminder, I have been writing about capitulation in the following posts. http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html http://www.dowtheoryinvestment.com/2019/05/dow-theory-special-issue-capitulation.html http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation.html http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation_11.html Well, I finally squeezed some time out of my agenda to pen another post concerning Schannep’s capitulation indicator. Today we will […]

Dow Theory special issue: which indices to use and the appraisal of secondary reactions under the Dow Theory

posted on: October 19, 2019

Answer to an email from a reader This post is a dedicated response to the email I received from one follower of this blog. I quote the email and my answer in red. To respect privacy I have deleted the name of its author. I feel the questions were well grounded, and hence readers may […]

Dow Theory Special Issue: Capitulation. The ultimate bottom indicator (V)

posted on: July 11, 2019

Measuring the risk when catching falling knives. So great? As a reminder, I have been writing about capitulation in the following posts. http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html http://www.dowtheoryinvestment.com/2019/05/dow-theory-special-issue-capitulation.html http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation.html Since capitulation is a mean reversing tool, and, by definition, we don’t wait until the trend shows signs of reversing, we are catching the proverbial “falling knife”. This means […]

Dow Theory Special Issue: Capitulation The ultimate bottom indicator (IV)

posted on: July 4, 2019

Shortening of the time requirement for secondary reactions As a reminder, I have been writing about capitulation in the following posts. http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html http://www.dowtheoryinvestment.com/2019/05/dow-theory-special-issue-capitulation.html As I explained in the past, “capitulation” is a mean reversing tool. When markets get severely oversold, we derogate from trend following, and bet for a trend reversal. The track record […]

Dow Theory Special Issue: Which markets are better suited to the Dow Theory (and Trend following in general) and the reason why

posted on: June 26, 2019

The power of trends and why it is not wise to disregard a Dow Theory signal based on the belief that the market is already overstretched. This is another post that I was written on June 19th at Nashville’s airport while being stranded due to bad weather conditions. However, it has been “matured” and edited […]