Category: Dow Theory

Dow Theory Special Issue: Why drawdowns matter

posted on: March 1, 2016

And why most investors should avoid them Some weeks ago, one reader of this Dow Theory blog alleged that the focus on “timing” the market, and hence avoiding drawdowns was not a good idea, since in the long run US stocks (or at least US stock indices) end up being winners. Furthermore, no dividends are […]

Dow Theory Update for February 23: Secondary (bullish) reaction against primary bear market signaled on February 22

posted on: February 23, 2016

Trends for precious metals unchanged US STOCKS The Transports has been rallying for 23 trading days since its Jan 20 closing lows. The INDU and SP500 have been rallying for 7 trading days and 11 calendar days. Hence, 3 indices have rallied more than 10 calendar days (it suffices just two). And the average […]

Dow Theory Special Issue: Putting the Dow Theory under Stress-Test (III)

posted on: February 8, 2016

Additional remarks concerning performance under secular bear markets As a consequence of my second post concerning the Dow Theory stress-test, Alpha Dow posted this comment: Hi there. First of all — I love the site. I’m an 18yr disciple of Dow Theory and a subscriber to Schannep and a practitioner myself. There is a dearth […]

Dow Theory Special Issue: Putting the Dow Theory under Stress-Test (II)

posted on: February 2, 2016

Performance under secular bear markets On December 7th, 2015 I started what is going to be a new “saga”. Its aim is to put the Dow Theory under a “stress-test”. We will try to think out of the box and imagine adverse scenarios which hitherto have not occurred yet. How would the Dow Theory perform […]

Dow Theory Special Issue: Very long term trend turned bearish as per the Dow Theory when applied using weekly bars

posted on: January 19, 2016

Dismal technical picture In my post of September 7, 2015 I said that, the August scare notwithstanding, the very long term trend as gauged by weekly bars remained bullish and that the recent decline that started in July and bottomed on August was merely a secondary reaction against the long term bullish trend. This article […]

Dow Theory Review for 2015

posted on: January 14, 2016

US Stocks Let’s briefly recap how our Dow Theory analysis fared in 2015. Did we do a good job at determining the primary trend of the markets? 2014, as explained here, was a good year for those applying the Dow Theory to stocks, gold, silver and their miners. 2015 has been a good year too […]

Dow Theory Update for January 8: How long will it take for the next primary bull market signal to be flashed?

posted on: January 8, 2016

Trends unchanged Yesterday, January 7th, the US stock market made lower confirmed lows. As I have explained in the last two posts (here and here), the primary bear market is in full gear and no secondary (bullish) reaction against the primary bear market has occurred yet. In a past post, I explained that following a […]

Dow Theory Special Issue: Additional thoughts concerning further declines following Schannep’s Dow Theory primary bear market signals

posted on: December 16, 2015

Updated statistical record Last Friday 11th a primary bear market was signaled for US stocks. More about the entrails of this primary bear market signal here. http://www.dowtheoryinvestment.com/2015/12/dow-theory-update-for-december-14.html I wrote that investors better heed primary bear market signals as determined by Schannep’s Dow Theory, as the statistical record compiled by Schannep in his book (page 108) […]

Dow Theory Special Issue: Putting the Dow Theory under stress-test (I)

posted on: December 7, 2015

A new Dow Theory saga is being started Introduction While followers of this Dow Theory blog may be inclined to think that I am a true believer in the Dow Theory, and hence, to some extent blinded and unable to see its flaws (if any), truth is that I am skeptical of everything when it […]

Dow Theory Special Issue: Richard Russell RIP

posted on: December 1, 2015

I have just known that legendary Dow Theorist Richard Russell passed away. More about his bereavement here. I owe to Richard Russell my first dabblings in the Dow Theory. He timely signaled the 2008 primary bear market, and, in the past, before I was committed to the Dow Theory (or even born) he made very […]

Dow Theory Update for October 8: Primary bull market signaled for US Stocks on Oct. 7

posted on: October 8, 2015

At least theoretically, as it has been a very dubious signal. The S&P 500 closing high of September 16th, 2015 was 1995.31. Yesterday, October 7th, the S&P 500 closed above such a closing high by closing at 1995.83. Thus, the S&P 500 managed by a hair to exceed the closing highs of the secondary reaction, […]

Dow Theory Special Issue: Lessons learned from the Chinese stock market crash (II)

posted on: September 14, 2015

How to exit when the Dow Theory refuses to setup “orderly” primary bear market signals. Recently, I wrote about the primary bear market signal for Chinese stocks. As you well know this primary bear market signal came much too late, if we are to judge from the percentage decline from the top to the exit […]