Indecisive action in stocks
Let’s see what the Dow Theory has in store for us today.
Stocks
Yesterday I was wondering whether under Dow Theory, we can declare the existence of a secondary reaction.
After carefully studying the charts of the SPY, Industrials and Transports, I conclude that under strict Dow Theory, we cannot detect the existence of a secondary reaction yet.
Thus, according to Schannep, we need at least two indices declining a minimum of 10 days with at least 8 trading days of declining prices for the average of all 3 indices. If we look at the chart of the SPY and Industrials we can see that we haven’t reached this count yet. The Industrials have been declining for 8 days and the SPY has declined for 9 days. Only the Transports have been declining for more than 10 trading days. So we still have to wait. Both the SPY and the Transports have experienced peak to trough declines exceeding 3% which set them up for a secondary reaction, once the time requirement is fulfilled.
The SPY and Transports closed up. The Industrials closed down. For the reasons explained above both the primary and secondary trend remains bullish.
Today’s volume was higher than yesterday’s. Since most indices closed up, it seems that volume was mildly bullish.
Gold and silver
GLD lost inventory….Again! I consider Fofoa’s latest post a must read in order to comprehend the fate of paper gold. You can find it here. If Fofoa is right, then we should brace ourselves for the following surprises:
· The EUR is not as doomed as many are keen to say.
· The USD is doomed (and maybe will collapse in hyperinflation throes).
· Physical gold will eventually decouple from “paper” gold.
In the meantime, GLD and SLV closed up. The primary and secondary trend remains bearish.
The gold and silver miners ETFs, GDX and SIL, closed up. The primary and secondary trend remains bearish.
Here you have the figures of the markets I monitor for today:
| Data for April 23, 2013 | |||
| DOW THEORY PRIMARY TREND MONITOR SPY | |||
| SPY | |||
| Bull market started | 11/15/2012 | 135.7 | |
| Bull market signaled | 01/02/2013 | 146.06 | |
| Last close | 04/23/2013 | 157.88 | |
| Current stop level: Bear mkt low | 135.7 | ||
| Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
| 8.09% | 16.34% | 7.63% | |
| DOW THEORY PRIMARY TREND MONITOR GOLD (GLD) | |||
| GLD | |||
| Bull market started | 05/16/2012 | 149.46 | |
| Bull market signaled | 08/22/2012 | 160.54 | |
| Exit December 20 | 12/20/2012 | 161.16 | |
| Current stop level: Sec React low | 11/02/2012 | 162.6 | |
| Realized Loss % | Tot advance since start bull mkt | ||
| 0.39% | 7.83% | ||
| DOW THEORY PRIMARY TREND MONITOR SILVER (SLV) | |||
| SLV | |||
| Bull market started | 06/28/2012 | 25.63 | |
| Bull market signaled | 08/22/2012 | 28.92 | |
| Exit December 20 | 12/20/2012 | 29 | |
| Current stop level: Sec React low | 11/02/2012 | 29.95 | |
| Realized gain % | Tot advance since start bull mkt | ||
| 0.28% | 13.15% | ||
| DOW THEORY PRIMARY TREND MONITOR ETF SIL | |||
| SIL | |||
| Bull market started | 07/24/2012 | 17.08 | |
| Bull market signaled | 09/04/2012 | 21.83 | |
| Exit January 23 | 01/24/2013 | 21.69 | |
| Current stop level: Sec React low | 11/15/2012 | 21.87 | |
| Realized Loss % | Tot advance since start bull mkt | Max Pot Loss % | |
| -0.64% | 26.99% | 27.81% | |
| DOW THEORY PRIMARY TREND MONITOR ETF GDX | |||
| GDX | |||
| Bull market started | 05/16/2012 | 39.56 | |
| Bull market signaled | 09/04/2012 | 47.77 | |
| Exit January 23 | 01/24/2013 | 44.56 | |
| Current stop level: Sec React low | 12/05/2012 | 45.35 | |
| Realized Loss % | Tot advance since start bull mkt | Max Pot Loss % | |
| -6.72% | 12.64% | 20.75% | |
Sincerely,
The Dow Theorist
