Category: Insights

Dow Theory Update for October 20: US stocks continue flirting with primary bear market signal

posted on: October 20, 2016

Trends unchanged I am writing before the close so things might change after the close. So readers beware. US STOCKS The primary trend is bullish as explained hereand here The secondary trend is bearish (secondary reaction against the primary bull market) as explained here According to the “Rhea/Classical” Dow Theory no secondary reaction has been […]

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 Update for October 14: A deeper look into the primary bear market signal for gold, silver and their miners

posted on: October 14, 2016

US stocks flirting with primary bear market signal (but not yet) In my last post (October 4th) I alerted about a primary bear market signal for gold, silver and their respective ETF miners. Well, I’d like to further delve into the primary bear market signal and the outcome for the trade taken as per the […]

Dow Theory Update for October 4: Stocks set up for primary bear market signal on September 30

posted on: October 4, 2016

It is very likely that a primary bear market for gold and silver will be signaled at today’s close I am writing before the close so things might change after the close. So reader beware. I am with a very heavy schedule so it is going to be a short post. US STOCKS The primary […]

Dow Theory Update for September 14: Secondary reaction for US stocks signaled on Sep 13

posted on: September 14, 2016

Classical Dow Theory hasn’t signaled any secondary reaction yet The primary and secondary trend is bullish as explained here and here Yesterday, both the Transports and the Industrials declined more than 3% of the primary bull market top (8/15 for the Industrials and 9/8 for the Transports). The S&P 500 merely declined -2.88% (off its […]

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 Update for September 7: The Transports confirm the primary bull market signal of August 11

posted on: September 7, 2016

The Transports remain, though, below the previous bull market high of 8109.19 US STOCKS The primary and secondary trend is bullish as explained hereand here The primary bull market signal of August 11th was given without the Transports’ confirmation (only the SPY and Industrials broke up their secondary reaction highs). Today the Transports have closed […]

Dow Theory Update for September 6: Silver and Gold, and their ETF miners, under a secondary reaction

posted on: September 6, 2016

Trends unchanged for stocks I am writing before the close. US STOCKS The primary and secondary trend is bullish as explained here and here Recent declines did not fulfill the “time” requirement for a secondary reaction. I don’t even bother to calculate the “extent” requirement. GOLD AND SILVER The primary trend is bullish (Dow Theory […]

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 20: Recent declines in Gold and Silver (and their ETF miners) do not qualify as a secondary reaction yet

posted on: August 20, 2016

Future important post When I find time (oh time!!!), I’d like to write about the market conditions where the Dow Theory (and specially Schannep’s Dow Theory) might “suffer” and underperform buy and hold. In previous studies (see here), I have shown that the Dow Theory tends to underperform buy and hold when markets display nice […]