Dow Theory Signals Bear Market in Bonds on 12/18/24
posted on: December 19, 2024
Powell’s Hawkish Tone Triggers Major Shifts in TLT and IEF Overview: All markets, notably bonds, reacted negatively to Powell’s more hawkish stance, as investors had anticipated more substantial and frequent rate cuts. The big drop TLT and IEF experienced on 12/18/24 triggered a primary bear market signal. Later today, or tomorrow, I will write about […]
Bonds at crossroads: Set up for a potential bear market signal for TLT and IEF completed on 11/27/24
posted on: November 29, 2024
Dissecting the most recent price action for TLT & IEF. Key price levels to monitor Overview: the most recent rally within an extended secondary (bearish) reaction has set up TLT and IEF for a potential primary bear market signal. The trend remains bullish to this day, but if the key prices I show in this […]
When Trends Speak Louder Than Data: Why Trend Following Wins Against Macro Investing
posted on: November 21, 2024
AI’s Verdict: Trend Following Trumps Macro in the Investment Arena I often receive emails highlighting macroeconomic data that supposedly contradicts or challenges the signals provided by price action—or trend-following—in markets like stocks, crypto, bonds, etc. These messages can give the impression that trend-following alone isn’t enough to keep us on the right side of the […]
Andrew Horowitz interviewed Manuel Blay on The Disciplined Investor’s podcast
posted on: September 30, 2024
We discussed what works and does not work to successfully time the stock market. I debunked many fundamental factors that have zero predictive power but nonetheless continue to be used by many to try to guess the market’s next move. I focused on what works: margin debt, market health, and some other factors. I discussed […]
Bull market for the gold and silver miners ETFs (GDX & SIL) confirmed on 9/24/24
posted on: September 27, 2024
Chinese Stimulus Sparks Melt-Up in Gold, Silver, and Mining ETFs. Overview: The markets were sniffing the Chinese stimulus days before it was official. All assets are in a melt-up mode; GDX led the parade, and finally, SIL caught up. The bull market in precious metals has been confirmed. Once again, the principle of confirmation saved […]
Precious Metals Bull Market Confirmed on 9/24/24: Gold and Silver Miners Soar
posted on: September 27, 2024
Chinese Stimulus Sparks Melt-Up in Gold, Silver, and Mining ETFs. Overview: The markets were sniffing the Chinese stimulus days before it was official. All assets are in a melt-up mode; gold led the parade, and finally, silver caught up. The bull market in precious metals has been confirmed. Once again, the principle of confirmation saved […]
3 Fundamental Blunders That Led Me to Trend Following
posted on: September 21, 2024
How Misplaced Trust in ‘Expert’ Opinions Led Me to Embrace Technical Analysis If you’ve been following me for a while, you know I firmly believe in trend following. I’ve learned that price action contains most—if not all—the information you need to succeed in the stock market (or any market, for that matter). But why did […]
Will Small Caps Continue Outperforming Large Caps?
posted on: July 22, 2024
Understanding Small Cap Stocks in the Current Market Expanded on 8/27/24 Will small caps continue outperforming large caps for a considerable time? Or have we just seen a flash in the pan? This is a question on many investors’ minds. While recent trends might suggest a resurgence of small-cap stocks, as shown by the chart […]
Is the Dow Theory Misunderstood? The Truth Behind the Dow Transportation Weakness
posted on: June 29, 2024
Secondary Reaction Highs (Lows): The Key to Market Confirmation Recent weakness in the Dow Jones Transportation Average relative to the Dow Jones Industrial Average has prompted many “experts” to proclaim a bear market signal. They argue that new all-time highs by the Dow Industrials, unconfirmed by the Dow Transports, spell doom for the overall stock […]
TheDowTheory.com and our recent recession alert featured by Mark Hulbert (MarketWatch)
posted on: June 14, 2024
Understanding the Schannep Recession Indicator and Its Impact on Market Timing We’re honored to have our Schannep Recession Indicator (SRI) featured in MarketWatch by Mark Hulbert on 6/14/24. We wrote a must-read article with the evocative title: “The latest unemployment report has triggered this spot-on recession indicator” Below is the link to the MarketWatch article […]
Unlocking the Power of Trend Following and Relative Strength: A Century of Outperformance
posted on: June 11, 2024
Reducing Drawdowns and Maximizing Returns Trend following and relative strength works. The latest research by Gary Antonacci and Carlo Zarattini, delving into almost 100 years of data, proves conclusively that when done correctly, market timing results in significant outperformance and, more importantly, drawdown reduction. Most investors get blinded by the “outperformance” and forget that the […]
Spotting Recessions and Bear markets: Schannep Recession Indicator vs. Sahm rule
posted on: May 30, 2024
Which one is even better? Spoiler alert: Schannep’s The “Sahm Rule” is a well-known recession indicator created by Claudia Sahm, an economist who worked at the Federal Reserve. This rule identifies the early stages of a recession when the three-month moving average of the U.S. unemployment rate rises by half a percentage point or more […]
