Are precious metals finding support?
Let’s get started with our Dow Theory commentary in this blog.
Strebler joins forces with Russell.
I have some news from the Dow Theory world. Richard Russell, of the “Dow Theory Letters,” has a new business associate to help him run his advisory. Jon Strebler has already written two interesting pieces (which are only available to subscribers). I feel this can be a fruitful cooperation. From what I gather, Strebler is slightly more bullish than Russell. His long term bullishness also applies to gold.
Special note on gold
GLD lost yesterday (Feb 21) an additional 9 tonnes of gold. In a new comment left at FOFOA’s blog, according to Victor the Cleaner (of whom we spoke yesterday), such inventory loss strengthens the odds of a bottom being in the making. I’m going to go out on a limb, but I feel two extreme outcomes are at hand: Either GLD pretty soon starts to go up strongly or if in spite of the inventory drain, it continues going down, something nasty may happen (which might signify a seizure of paper gold markets). Of course, all this talk is not Dow Theory, and traders in paper gold shouldn’t give a hoot about it. However, those investors in physical gold and, in general, any investor concerned with the health of the financial markets should keep an eye on GLD’s inventory changes and its relationship with the price of gold.
Stocks
The SPY, Industrials and Transports closed up. The primary and secondary trend remains bullish.
Today’s volume was lower than yesterday’s. Thus, it was a bearish volume day, as ascending prices were not supported by increasing volume. This is the fifth bearish volume day in a row, which lends credibility to the idea that more weakness is likely to be seen in the days ahead. The analysis of volume I conducted yesterday remains not only fully in force but gets reinforced by today’s volume. Here you have an updated chart that speaks for itself:
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| Volume is hinting that more bearish action is to be expeceted in the days ahead |
Gold and silver
Gold and silver (GLD and SLV) closed up. Leaving aside my musings concerning the “puke” indicator, one thing is clear: For GLD and SLV the primary and secondary trend remains bearish.
GDX (the gold ETF miner) closed down, its silver peer SIL closed up. The primary and secondary trend remains bearish.
Special issue concerning the 1982-1999 secular bull market
If time allows me, I plan to post during this weekend a special Dow Theory issue concerning the Dow Theory performance during the 1982-1999 secular bull market (prior studies here and here). Readers of this blog, stay tuned.
Here you have the figures of the markets I monitor for today:
| Data for February 22, 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 | 02/22/2013 | 151.89 | |
| Current stop level: Bear mkt low | 135.7 | ||
| Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
| 3.99% | 11.93% | 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
