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
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Dow Theory Investment
  • Dow Theory Update For March 15: Stocks Down On Huge Volume  0 comments
    Mar 15, 2013 5:15 PM | about stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL

    Gold and silver up

    GLD inventory conundrum explained?

    Richard Russell of the "Dow Theory Letters" has recently said that "China is looking at the gold ETFs as an opportunity to collect huge hoards of gold in one fell swoop. Beneath the quiet and dull action of gold, a fierce battle among the accumulators is going on". Is China buying GLD shares and redeeming them in order to get the inventory, that is the gold bullion? It seems Russell thinks so.

    By the way, yesterday GLD didn't lose any inventory.


    The SPY, Industrials and Transports closed down. The primary and secondary trend is bullish according the the Dow Theory.

    Today we had a monster volume day, which clearly exceeded yesterday's. Since prices went down, it has a bearish connotation. Please look at the chart below, and you will see that today was a bearish volume reversal bar. Normally, such bars have follow-up, so the odds increase for lower prices ahead. Thus, volume remains bearish for the reasons I gave here.



    (click to enlarge)
    Today's monster volume shows that selling pressure is rising

    Gold and silver

    GDX and SLV closed up. The primary and secondary trend remains bearish.

    GDX and SIL closed up. The primary and secondary trend remains bearish.


    The Dow Theorist

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