… A secondary reaction might be in the making
Let’s get started with our Dow Theory commentary for today.
If you are interested in reading the 2013 Dow Theory review please go here. You’ll see that we tended to be on the right side of the market most of the time.
US stocks
The SPY, and the Transports closed up. The Industrials closed down. Days pass by and the 12/31/2013 closing highs remain untouched. The longer this persists and the higher the odds for a secondary reaction to be developing. It is too soon to tell, but we keep our eyes glued to the charts.
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| Is a secondary reaction developping? |
The primary trend was reconfirmed as bullish on October 17th and November 13th, for the reasons given here and here.
Gold and Silver
SLV and GLD closed down. For the reasons I explained here, and more recently here, I feel the primary trend remains bearish. HereI analyzed the primary bear market signal given on December 20, 2012. The primary trend was reconfirmed bearish, as explained here. The secondary trend is bullish (secondary reaction against the primary bearish trend), as explained here.
As to the gold and silver miners ETFs, SIL and GDX closed down. The primary trend is bearish, as was profusely explained here and here. Likewise, the secondary trend is bearish.
Here you have the figures for the SPY which represents the only market with a suggested open long position:
| Data for January 8, 2014 | |||
| DOW THEORY PRIMARY TREND MONITOR SPY | |||
| SPY | |||
| Bull market started | 06/24/2013 | 157.06 | |
| Bull market signaled | 07/18/2013 | 168.87 | |
| Last close | 01/08/2014 | 183.52 | |
| Current stop level: Secondary reaction low | 165.48 | ||
| Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
| 8.68% | 16.85% | 2.05% | |
Sincerely,
The Dow Theorist
