Category: Insights

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 […]

Gold and Silver ETF miners (GDX & SIL) soar: Primary bull market re-confirmed on 7/16/2024

posted on: July 16, 2024

Gold and Silver are also in a bull market Overview: GDX and Sil underwent a secondary reaction against the primary bull market. Confirmed higher highs by both ETFs have reconfirmed the primary bull market. Gold and Silver are in a bull market of their own, as I explained HERE. I see most assets going to […]

Bonds at crossroads: Contradictory setups completed imply the trend is now unclear

posted on: July 15, 2024

Once hesitation is over, the next move can be explosive. Overview: The bond market is really at a crossroads. Depending on the timeframe applied, we got two contradictory potential signals. The shorter-term application of the Dow Theory, which I favor in cases like this as it is more reactive, completed the setup for a potential […]

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 […]

SLV and GLD: Evaluating the Secondary Reaction and the Setup for a Potential Primary Bear Market

posted on: June 20, 2024

The primary trend remains bullish Overview: SLV and GLD (silver and gold) are in a secondary reaction, and on 6/20/24, the setup for a potential primary bear market has been completed. The gold and silver miners ETFs (GDX and SIL) are also in a secondary reaction, but no setup for a potential primary bear market […]

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 […]

Dow Theory Signals Bull Market for Bonds on 6/4/24: Recession or Soft Landing?

posted on: June 6, 2024

US Bonds Turn Bullish: What’s Next for the Economy? Overview: When appraised by the more reactive application of the Dow Theory, the trend of US bonds turned bullish on 6/4/24. The question is: Is the bond market discounting a recession or merely a soft landing resulting in lower inflation? The unemployment rate for May, to […]

Dow Theory Alert: The trend for US bonds could change from bearish to bullish soon. Learn the critical price levels to watch

posted on: June 3, 2024

From Bearish Trend to Potential Bull Market: TLT and IEF Insights Overview: TLT and IEF remain in a primary bear market, but this could change soon. If TLT and IEF jointly surpass their 5/15/24 closing highs, the trend will shift from bearish to bullish. More details are provided below. General Remarks: In this post, I […]

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 […]

Back to “divergent” interpretations of the Dow Theory

posted on: May 27, 2024

Setting Dow Theory concepts straight amidst so much “fake” Dow Theory. Recent Transport weakness relative to the Dow Industrials prompted many “experts” to proclaim that this is a bear market signal. Let’s clarify the concepts. First, divergence and lack of confirmation, while similar, are not the same and have different implications. Divergence entails one […]

Gold and Silver Surge: Dow Theory Confirms Bullish Primary Trend on 5/17/24.

posted on: May 18, 2024

Overview: Higher confirmed highs by SLV and GLD (silver and gold) have reaffirmed the primary bull market. The secondary reaction is over. The most recent pullback in the gold and silver miners’ ETFs (GDX and SIL) was so modest that it did not qualify as a secondary reaction. So, a bull in full gear. General […]