Manuel Blay's  Instablog

Manuel Blay
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Trader and investor. My trading is short-term based (avg trade duration 4-5 days). As investor I'm deeply influenced by Dow Theory
My blog:
Dow Theory Investment
  • Dow Theory Update For Nov 23: Volume Not Confirming Stock Market Action  0 comments
    Nov 24, 2012 2:36 PM | about stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL
    Gold and silver escape danger zone

    Let's get started with our Dow Theory commentary for today.

    Stocks closed up today. However, according to the Dow Theory, both the primary trend and secondary trend remain bearish.

    However, volume, again, refused to confirm the stock's advance.

    As you can see in the chart below today was a bearish volume day again. I know that today was a short trading day. However, what I see in the chart is that volume is not confirming market action. Red arrows and a down trendline confer a bearish inference.



    (click to enlarge)
    Volume bearish. Look at the diverging trends of price and volume

    Gold, silver and their respective miners ETFs closed up. Technically, nothing has changed according to the Dow Theory. The primary trend is bullish whereas the secondary trend is bearish.

    It is important to note that gold and silver seem to be escaping the "danger area" of the Nov 2 secondary lows. As you know, a joint violation by gold and silver of the Nov 2 lows would flash a primary bear market signal. Today's action by making jointly new higher highs (although the highest highs have not been bettered yet), gold and silver are displaying strength.

    Silver continues being the metal showing better relative strength.

    Here you have an updated chart of GLD and SLV.



    (click to enlarge)
    Gold and silver seem are far from flashing a primary bear market signal


    the Dow Theorist

    Stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL
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