Category: Dow Theory

Are Chinese stocks in a bear market?

posted on: June 25, 2013

Chinese stocks and the Dow Theory According to Zero Hedge, the Shanghai composite entered a bear market on June 24, since now it is down -22% from its February highs. Conventional wisdom has it that a bear market is signaled when stocks go down more than 20%. However, is it necessary for investors to wait […]

After the dust hast settled: Commentary to the Dow Theory primary bear market signal

posted on: June 21, 2013

Its implications for investors As I announced earlier today on this Dow Theory blog, today a primary bear market has been signaled. Those really interested in understanding the intricacies of this primary bear market signal, and the setup that preceded it, are encouraged to go here (for today’s description of the primary bear market signal), […]

Face off: Schannep versus “classical” Dow Theory

posted on: June 20, 2013

Part I. Delineating the object of our study It is no secret that this blogger truly yours has always passionately defended Schannep’s Dow Theory “flavor.” For the uninitiated, it suffices to say that the Dow Theory is not monolithic and, hence, different variations of a common theme cohabit in hopefully peaceful harmony. More about the […]

Dow Theory special issue: Dissecting the classical/Rhea Dow Theory record. Profit factor and more

posted on: June 1, 2013

Part 2: Final statistics. Eight days ago, I posted “Dissecting the classical/Rhea Dow Theory record.” In that post, I examined vital statistics concerning the positions taken in pursuance of the Dow Theory primary bull and bear market signals. Today, we will expand further our analysis by focusing on: · Win to lose ratio. · What […]

Dow Theory special issue: Dissecting the classical/Rhea Dow Theory record

posted on: May 24, 2013

Part I In previous posts of this Dow Theory blog, we occupied themselves with the evaluation of the Dow Theory performance, as explained here. Furthermore, we broke down such data into secular and bull markets as presented here and here. One thread in common was that all these studies focused on a comparison of the […]

Dow Theory special issue: Introducing Schannep’s stoploss for the stock market

posted on: May 17, 2013

In my previous post, I made some observations concerning the unrealized gains made by those following the primary bull market signal in the stock market. I finished my observations by mentioning two tools to help the investor avoid devastating losses (or to lock in profits) if the trend suddenly reverses. One of this “tools” is […]

Dow Theory Special issue: Differences between trading and investment

posted on: May 3, 2013

Is trading so different from investment? For me, everything is the same. They are different ends that lead (or should lead) to the same goal. The goal is to protect your capital (avoid drawdons and paper losses as much as possible) and, if possible, make it grow. If you achieve this goal by day trading: […]

Dow Theory Special Issue: A new Answer to the New Low Observer (NLO)

posted on: March 2, 2013

The New LowObserver (NLO) is an avid student of the markets. Its website contains a wealth of information, which spans many subjects (Dow Theory, specific stocks, book list, market observations, etc.) NLO posted a comment in my Seeking Alpha blog in the past which resulted in my post “An Answer to the New Low Observer […]

Dow Theory special issue: Dow Theory’s performance during the secular 1982-1999 bull market

posted on: February 22, 2013

How often does the Dow Theory outperform buy and hold? Part III In my post “How often does the Dow Theory outperform buy and hold?”, which you can find here, I started a series of articles dedicated to examining the classical/Rhea Dow Theory “flavor” under all market environments and across time. At the risk of […]

Dow Theory special issue: Dow Theory’s performance during the secular 1966-1981 bear market

posted on: February 9, 2013

How often does the Dow Theory outperform buy and hold? Part II In my post “How often does the Dow Theory outperform buy and hold?”, which you can find here, I started a series of articles dedicated to examining the classical/Rhea Dow Theory “flavor” under all market environments and across time. In that post, we […]

Dow Theory Special Issue: Assessing the primary bear market signal for gold and silver miners ETFs

posted on: January 26, 2013

Should we heed the Dow Theory when applied to ETFs? As you could read in this post, the Dow Theory has recently signaled a primary bear market for GDX and SIL (the gold and silver miners ETFs). Here you have a chart depicting recent price action. The pink lines are the secondary reaction lows that […]

Dow Theory special issue: How often does the Dow Theory outperform buy and hold?

posted on: January 18, 2013

Evaluating performance on a year-end basis. It is no secret that I am deeply influenced by Schannep’s Dow Theory flavor. To learn more about Schannep’s flavor, I suggest you go here, or if you plan to buy his excellent book here. For reasons that go beyond my comprehension (maybe because he’s the best-performing Dow Theorist) […]