Category: Insights

Why do I only write about the Dow Theory?

posted on: October 4, 2012

In German, they have a saying that goes: “Schusterbleibt bei deinen Leisten”which translates into Englishas “Clobber,stick to youtrade.” Inother words: Stay focused. For most investors, the Dow Theory is justan extra tool in their toolbox.It lookstoo simple to bethe consideredthe maintool. Furthermore, sinceit looksso simple,everyone believes thata cursoryreading of themain tenetsof DowTheory makes themexperts and, […]

Dow Theory Update for Oct 4: Very bullish day. Important market action

posted on: October 4, 2012

Secondary reaction in gold and silver definitely avoided. Under Dow Theory today it was a relevant day because market action has clearly aborted the incipient secondary reaction in the gold and silver markets. More on this below. Today was a clearly bullish day. All the markets we monitor closed up for the day. The Industrials […]

Stock markets forming a „line“: What does it mean under Dow Theory?

posted on: October 3, 2012

Follow up to the Dow Theory update for Oct 3 As I said earlier this evening I see that the SPY and the Industrials are forming a so called “line”. What’s a line? I will use Rhea’s definition to understand what a “line” is under Dow Theory. According to him: “A line is a price […]

Dow Theory update for Oct 3: Watch out the miners!

posted on: October 3, 2012

Nonetheless, primary trend remains bullish Today the S&P, Industrials and Transports all closed up. So it seems that the secondary reaction fails to materialize. However, I’m starting to discern a pattern that under Dow Theory has significance. The Industrials and the SPY seem to be forming a “line”. Later today or early tomorrow I […]

Dow Theory update for October 2: Mixed day. No news.

posted on: October 2, 2012

Today the Transports and the SPY closed up. The Industrials closed down. So we had a mixed day with no consequences. So there is nothing new under the Dow Theory. Therefore, what I wrote earlier today “Dissecting a secondary reaction under Dow Theory” about the non existence of a secondary reaction remains valid and unchanged. […]

Dissecting a secondary reaction under Dow Theory

posted on: October 2, 2012

Result: No secondary reaction yet As I promised yesterday, here you have an updated chart of the Industrials, Transports and the SPY and the implication to be derived from a Dow Theory standpoint. As you can see, only the Transports have fulfilled the requirements for a secondary reaction to exist. The Industrials haven’t even corrected […]

Dow Theory update for October 1: Markets up. No technical changes…yet

posted on: October 1, 2012

A secondary correction may happen any time now On Friday, Sept 28, the stock market had been trending lower for the last 10 trading days (for the SPY and Transports). This is the minimum time requirement for a secondary reaction to exist. However, for a secondary reaction to exist it is necessary that two of […]

Plain vanilla Dow Theory? Or does Dow Theory come in many flavors? IV and final

posted on: September 29, 2012

Part IV. Recap and main tenets of my own “flavor” Continued from this post: http://www.dowtheoryinvestment.com/2012/09/plain-vanilla-dow-theory-or-does-dow_22.html All in all: If you want the best advice, follow both Russell and Schannep. Both are great Dow Theorists and both are alive. Take advantage of it! Is any one of the Dow Theory “flavors” we have hitherto analyzed to […]

Dow Theory update for Sept 28: Markets down with no technical consequences

posted on: September 28, 2012

It was Charles Dow, father of the Dow Theory, who said that in the world of investing you have to “exercise enough patience for six men.” He meant by this that the markets don’t accommodate our wishes and even the best laid out investment plan may take time to materialize. The Dow Theorist investing along […]

Dow Theory update for Sept 27: Bull markets don’t die easily

posted on: September 27, 2012

Gold and Silver on the verge of breaking out prior highs Today all markets I monitor closed up. What else can I say? The primary bull market remains intact and the long awaited secondary correction (which would be a good opportunity for latecomers to be long stocks and precious metals as you can read here) […]

Do the Transports still matter under Dow Theory?

posted on: September 27, 2012

Should other indices be included? What indices should be taken into account in order to apply Dow Theory? This is a thorny issue where disagreement reigns among the Dow Theorist fraternity. I hope this blog helps little by little to set the record straight. This post is a small contribution to this noble end. Some […]

Dow Theory update for Sept 26: Finally, we get a 3% pullback

posted on: September 26, 2012

However, precious metals still resilient The three stock indices I monitor closed down for the day and we get some news which I would label of “tertiary” importance. I see three kinds of movements. The first is the primary trend or primary movement which may span more than one year. The second one is the […]