Category: Insights

Dow Theory Update for July 10: Dissecting the current secondary reaction in stocks

posted on: July 10, 2013

Stocks take a breather. Precious metals languish Yesterday I announced the secondary trend of the market had turned bullish. This is tantamount to saying that there is an ongoing secondary reaction against the primary bearish trend. Well, let’s dig deeper into it. As I wrote here, please bear in mind that appraising secondary reactions […]

Dow Theory Update for July 9: Stocks close to breaking the last recorded highs

posted on: July 9, 2013

Possible change of trends for stocks at hand Gold GOFO rates turn negative Zero Hedgereports that GOFO rates have just turned negative. As the article explains, it is difficult to isolate “in real time” what caused this dislocation. However, irrespective of the specific cause, a negative GOFO indicates that something is wrong with the gold […]

Dow Theory Update for July 8: Stocks closed up. Primary trend remains bearish

posted on: July 8, 2013

Richard Russell on the importance of market timing Richard Russell, of the “Dow Theory Letters”, recently nailed it when he wrote “And it’s also a matter of timing. The graveyards of Wall Street are filled with brilliant men who were right too soon.” I couldn’t say it better in so few words. What separates winners […]

Dow Theory Special Issue: Secular trend versus long term trend

posted on: July 5, 2013

Case in point GOLD Followers of this Dow Theory blog know I am quite skeptical as to investing along the secular trend. My post “Fundamental versus Technical analysis and Dow Theory. Who is right?” highlights the risks pertaining to investing along the secular trend. When I refer to “secular” trend, I mean trends lasting at […]

Dow Theory Update for July 5: Precious metals listless. Trends unchanged

posted on: July 5, 2013

Stocks closed up Great article on the advantages of market timing Those skeptical as to the benefits of market timing, and its ability to increase slightly profits while drastically reducing drawdowns versusbuy and hold, are advised to read “Timing Method Performance Over Ten Decades“, penned by Mutual Fund Observer. The article delivers a breakdown of […]

Dow Theory Update for July 3: No change in trends

posted on: July 3, 2013

I am writing these words almost two hours before the NY close. From what I see on the charts, there are no changes in trends. Tomorrow I will provide a more ample Dow Theory commentary. Stocks The primary trend and secondary trend is bearish for the reasons explained here, and further explained here. I cannot […]

Dow Theory Update for July 2: Deflationary forces in action

posted on: July 2, 2013

Precious metals and stocks closed down Today is going to be a short Dow Theory commentary, as there are no relevant events. Stocks The SPY, Industrials, and Transports closed down. The primary trend and secondary trend is bearish for the reasons explained here, and further explained here. Today’s volume was higher than yesterday’s, which has […]

Dow Theory Update for June 28: Precious metals rebound or a dead cat bounce?

posted on: June 28, 2013

Primary and secondary trends unchanged. Let’s get started with our Dow Theory commentary for today. Stocks The SPY, Industrials, and Transports closed down. The primary trend and secondary trend is bearish for the reasons explained here, and further explained here. Today’s volume was much higher than yesterday’s, which is bearish as volume expanded with declining […]

Dow Theory Update for June 27: Paper gold melting down

posted on: June 27, 2013

Stocks rally on weak volume Time to buy the junior gold miners ETF GDXJ? Mebane Faber of Mebane Faber Research has penned an interesting article named “What happens when you buy assets down 80%”. In the article she analyses the subsequent 3 years return when you buy a sector, industry or country that has declined […]

Dow Theory Update for June 26: Precious metals gap down and fall out of bed

posted on: June 26, 2013

Stocks closed up Piece of wisdom of Gartman, as quoted by Richard Russell. Richard Russell, of the Dow Theory Letters, has nailed it down. When trying to call a bottom in gold, he wrote: “I’m going to be kind and say that gold has put in a base at 1350. I’m going to side with […]

Dow Theory Update for June 25: Stocks closed up. No change in trends

posted on: June 25, 2013

Precious metals listless. Dow Theory and Chinese stocks As you know, the US stock market is in a primary bear market, as I have explained here, and further explained here. I also wrote that less than 5% was lost from peak to trough, which is outstanding timing. So I wanted to see whether the Dow […]

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 […]