Under Dow Theory nothing has changed
Let's begin with our Dow Theory analysis for today in this blog.
What are other Dow Theorists doing? Richard Russell, of the "Dow Theory Letters", who was turning mildly bullish (or at least not outright bearish short term) is turning bearish again. He hoped that the last rally was going to have longer legs. He has been disappointed by recent market action.
Jack Schannep, of "thedowtheory.com" sends us an unambiguous message: The primary trend is bearish since November.
The SPY and the Industrials closed down today. The Transports closed up. Technically, nothing has changed. The primary trend is bearish and the secondary trend bullish.
Volume was higher today than yesterday's. As it was a down day, it has a bearish connotation. Here you have an updated chart.
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| Volume reamins bearish. Even the untrained eye can spot more red arrows |
As to the precious metals we had mixed action.
Gold (GLD) and silver (SLV) closed down today. The dreaded Nov 2 secondary reaction lows are becoming nearer and nearer. However, for the time being, the primary trend remains bullish and the secondary trend bearish. As I have written several times, a bullish BLV/GLD ratio (long-term bond term bond /gold) acts as a brake for gold. Gold will not be ready to go really up until such ratio turns bearish, which denotes stronger gold. Furthermore, if the bullishness of the ratio persists (stronger bonds), the odds for a violation of the Nov 2 lows increase. You can read more about this vital, but often ignored ratio, here. So, in spite of my fundamentally-based secular bullishness on physical gold, I cannot ignore the technical warnings in the shorter term.
Conversely, GDX and SIL closed higher. The primary trend remains bullish and the secondary trend bearish.
Sincerely,
The Dow Theorist