Category: Dow Theory

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

posted on: October 17, 2016

Dow Theory’s performance under weak cyclical bull markets This “stress-test” saga has dealt with performance under secular bear markets Another environment which is detrimental to the Dow Theory is weak cyclical bull markets. What is a cyclical bull and bear market? I see cyclical bull/bear markets as a long movement which is an order of […]

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

posted on: September 9, 2016

When most ruled-based trading ceases to work, the Dow Theory continues to perform In this post of my stress-test saga, I made clear that we are currently living a real “stress-test”. Current market conditions are not the best for the Dow Theory. Narrow ranges of less than 15% are detrimental (but not lethal) to the […]

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

posted on: September 2, 2016

Fractality at work. Narrow ranges tend to contain narrow secondary reactions This post is to be understood as an “addenda” to my yesterday’s post. I feel the following thoughts further strengthen my belief concerning the sturdiness of the Schannep’s Dow Theory under narrow range conditions. Thus, the losses resulting from a prolonged ranging environment could […]

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

posted on: September 1, 2016

What happens to the Dow Theory when the market enters into “fibrillation” (Narrow ranges)? Looking into the future The following conclusions may be derived from my first post concerning the Dow Theory and narrow ranges: 1) Historically, the maximum drawdown caused by cumulative losing trades amounted to less than 19%. 2) This drawdown was not […]

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

posted on: August 29, 2016

What happens to the Dow Theory when the market enters into “fibrillation” (Narrow ranges)? We continue our saga of looking at the Dow Theory from all possible angles (specially the stressful ones). Narrow ranges are the plague to trend followers. While the Dow Theory by integrating the time and extent element is less prone than […]

Dow Theory Update for August 15: More on the primary bull market signal of August 11, 2016

posted on: August 15, 2016

Trends in precious metals universe unchanged US STOCKS As it was reported here, last August 11th a primary bull market was signaled according to Schannep’s Dow Theory. Here you have un updated chart. Schannep’s Dow Theory signaled primary bull market on August 11 It is important to note that the “Rhea/Classical” Dow Theory […]

Dow Theory Update for July 21: Two typical Dow Theory misconceptions (II)

posted on: July 21, 2016

And setting the record straight I am writing before the open. Misconception 2: Lack of confirmation suffices to change a trend A recent article post on Zero Hedge with the bombastic title “The One Key Indicator Pointing To A Bear Market” makes two errors. The first one is to assume that the market is still […]

Dow Theory Update for July 19: Two typical Dow Theory misconceptions (I)

posted on: July 19, 2016

And setting the record straight Many badmouth the Dow Theory, and I must say for a good reason. Yes, criticism aimed at the Dow Theory does not surprise me because it is casually studied and applied. It appalls me to read many “experts” getting things half right, which is tantamount when investing money to half […]

Dow Theory Special Issue: Does it make sense to short with the Dow Theory?

posted on: July 8, 2016

Primary and Secondary Trends unchanged This post is my answer to Algyros, a faithful follower of this blog. Basically, he asked about shorting with the Dow Theory. Does it make sense? My first answer read as follows (link to it here): I’d summarize my opinion concerning shorting as follows: • Primary bear markets last less […]

Dow Theory Special issue: How good is Schannep’s Dow Theory at picking bottoms and exiting tops?

posted on: July 1, 2016

Trends unchanged on stocks and precious metals. On many occasions, and based on my observations of Schannep’s Dow Theory primary bull and bear market signals, I have written that buy signals tend to be signaled at roughly 5-7% from the lows (bottom) and sell signals at around 5-7% from the highs (top). I must confess […]

Dow Theory Update for June 27: Primary bear market unambiguously signaled for US stocks on Friday 24

posted on: June 27, 2016

Trends for precious metals and miners unchanged This post has been written and matured during the weekend. It is being posted some 25 minutes after the open of Monday 27. US STOCKS Well, the markets have cast their ballot too. Today, Friday, June 24th, the S&P 500 has closed 3 points below its May 19th […]

Dow Theory Update for May 24: Exceptionally, the Classical Dow Theory might be earlier than Schannep’s Dow Theory

posted on: May 24, 2016

Gold and Silver very close to secondary (bearish) reaction US STOCKS The primary trend (as determined by Schannep’s Dow Theory) is bullish, as explained here and here. The secondary trend is bearish (secondary reaction), as explained here. Since I alerted on May 14th about the existence of the secondary reaction, stocks have extended their […]