Category: Insights

Dow Theory Update for August 26: Non confirmation persists, and hence the primary bull market has not been confirmed

posted on: August 26, 2014

Can momentum be arbitraged away? This is the title of an interesting article posted by Dorsey Wright, which you can find here. As you will see momentum strategies (and the Dow Theory is part and parcel of momentum) are very likely to continue performing in the future because of two reasons: a) Momentum tends […]

Dow Theory Update for August 25: SPY continues making higher closing highs unconfirmed by the Transports and Industrials

posted on: August 25, 2014

No changes on the precious metals front US STOCKS The chart below says it all. Only the SPY has broken up the blue horizontal line (primary bull market highs): The Industrials and Transports remain below the primary bull market highs Hence, we cannot declare the second reaction finished and the primary bull market reconfirmed. […]

Dow Theory Update for August 21: SPY makes higher closing highs which remain unconfirmed

posted on: August 21, 2014

Precious metals exhibit weakness (this is why they are in a primary bear market). US Stocks The SPY continues making higher highs, which until now have not been confirmed by the Industrials (in spite of closing up) and the Transports, which closed down. What I wrote yesterday remains fully valid. The primary trend remains bullish, […]

Dow Theory Update for August 20: The SPY makes higher closing highs unconfirmed

posted on: August 20, 2014

No changes in the gold and silver universe. Very brief Dow Theory Update today. The SPY made higher closing highs unconfirmed by the Industrials and Transports. Thus, even though the SPY was able to pierce the last recorded primary bull market closing highs, the lack of confirmation, according to the Dow Theory (be it Schannep’s […]

Dow Theory Update for August 18: Stocks set up for either primary bear market signal or reconfirmation of primary bull market

posted on: August 18, 2014

GDX and SIL have not signaled primary bull market yet (but remain close to doing it) US Stocks The SPY, Industrials and Transports closed up. The primary trend remains bullish, as explained here, and more in-depth here. The primary trend was reconfirmed as bullish on October 17th, 2013, and November 13th, 2013 and March 7th, […]

Dow Theory Update for August 13: No stock index has rallied more than 3% yet

posted on: August 13, 2014

SIL and GDX remain within striking distance of the secondary reaction highs. US Stocks The SPY, Industrials and Transports closed up. The primary trend remains bullish, as explained here, and more in-depth here. The primary trend was reconfirmed as bullish on October 17th, 2013, and November 13th, 2013 and March 7th, 2014, for the reasons […]

Dow Theory Update for August 12: SIL and GDX, once again, close to signaling a primary bull market

posted on: August 13, 2014

Secondary reaction in stocks runs its course US Stocks The SPY, Industrials and Transports closed down. The primary trend remains bullish, as explained here, and more in-depth here. The primary trend was reconfirmed as bullish on October 17th, 2013, and November 13th, 2013 and March 7th, 2014, for the reasons given here, here and […]

Dow Theory Update for August 7: Stocks extend their decline and Secondary reaction continues

posted on: August 7, 2014

Gold’s surge does not change any trend Mini Dow-Theory Update for today. Yesterday, and the day before yesterday I announced a secondary reaction for stocks. Today the SPY, Industrials and Transports closed down and deepened the ongoing secondary reaction. The chart below highlights (red rectangles) the (bearish) secondary reaction against the primary bullish trend. Orange […]

Dow Theory Update for August 5 (II): Looking deeper at the secondary reaction in stocks

posted on: August 6, 2014

Trends for precious metals unchanged Yesterday, I warned that if stocks closed below their August 1st closing lows a secondary reaction would be signaled. Well, stocks did violate their August 1st lows, and accordingly, a secondary reaction has been signaled according to the Dow Theory (Schannep’s version) Here you have the chart that says it […]

Dow Theory Update for August 5: Secondary reaction for stocks likely to be signaled at today’s close

posted on: August 5, 2014

I am writing these lines two hours before the close. The SPY, Industrials and Transports are likely to close below the last recorded minor lows (those of Friday, August 1st) and accordingly a secondary (bearish) reaction against the primary bullish trend will be signaled, because: a) At least two indices declined more than 3% from […]

Dow Theory Update for July 31: Stocks are flirting with a secondary reaction

posted on: August 1, 2014

But we are not there yet. US Stocks The Industrials has been declining for 11 trading days. The Transports for 6 days and the SPY for 5 days. Thus, in spite of today’s big decline, it is still too early to signal a secondary (bearish) reaction against the primary bullish trend. Let’s remember the rules […]

Dow Theory Update for July 29: Stocks, gold, silver and their miners have not changed their trends

posted on: July 30, 2014

Reality Check for Forecasting This is the title of a great article which you can find on Dorsey Wright’s blog. It clearly shows that forecasters consistently fail in their predictions. The bottom line is clear: Trend following is a much more sensible approach. Put aside your ego and hone your skills to become good at […]