Yesterday’s higher high of the Industrials unconfirmed yet.
Special note on gold
GLD lost yesterday (Feb 27) a whopping 12.04 tonnes of gold (0.947%). Thus, inventories have been declining for 7 days in a row. All in all, inventories have declined from 1322.97 tons to 1258.4 tonnes, that is 64.57 tonnes or 4.88%.
I have written extensively about the bullishness of such an event (contrary to conventional wisdom), as you can find hereand here.
Today, I’d like to add that the appetite for physical gold must be truly enormous. If we look at the pattern of inventory losses, we can see that even with ascending prices (until February 26) the trickle down continued (which implies that the price advance was not enough in order to quench demand for physical). However, yesterday’s phenomenal loss (Feb 27) coupled with a down day, implies that as soon as the price declines (even slightly) demand for physical shoots up. Thus, the pattern I see of prices and inventory changes tells me that the market for physical gold is under strain and that the modest rally of the last few days was not enough to calm the market.
So something has to give in. Either we see a big rally in paper gold in the next few weeks, or some severe dislocation is likely to occur.
Stocks
The SPY and the Industrials closed down. The Transports closed up. Yesterday’s higher high made by the Industrials has not been confirmed yet. The longer the non confirmation persists, the higher the odds of a secondary reaction. However, it is too soon to tell.
Today’s volume was higher than yesterday’s, which makes it a bearish volume day. Thus, today we had the eighth bearish volume day in a row.
Gold and silver
GLD and SLV closed down today. The primary and secondary trend remains bearish.
The gold and silver miners ETFs closed down. The primary and secondary trend remains bearish.
Here you have the figures of the markets I monitor for today:
| Data for February 28, 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 | 02/28/2013 | 151.61 | |
| Current stop level: Bear mkt low | 135.7 | ||
| Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
| 3.80% | 11.72% | 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
