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 March 19: In Spite Of All Noise No Change In Trends  0 comments
    Mar 19, 2013 5:01 PM | about stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL

    Gold again up. Silver does not confirm.

    Special note on GLD

    GLD puked yesterday 13.55 tonnes or 1.09%, which is a massive "puke." That such a puke occurs within a day when gold was clearly up is even more bullish as it denotes that higher prices don't quench the thirst for physical gold (which can be had by redeeming a basket of GLD shares). Once again, I insist that those really interested in understanding GLD "pukes" should read the seminal work produced by Victor the Cleaner.

    However, such avidity for physical gold, shows that something is brewing in the gold market. We are living exceptional and turbulent times, and we shouldn't take anything for granted, as recent events in Cyprus have painfully shown.


    The Industrials closed up. The SPY and Transports closed down. The primary trend and secondary trend remain bullish.

    Today's volume was higher than yesterday. This has a bearish connotation since declining prices were confirmed by expanding volume. The overall picture of volume remains bearish, which suggest that the odds favor the development of a secondary reaction. At the very least the reversal bar we had a couple of trading days ago, suggests that it is likely that we see some more decline ahead. If you look at the chart below, you can see that the previous reversal bar clearly had some downside follow-up (even though it didn't materialize into a full-blown secondary reaction).



    (click to enlarge)
    The reversal bar of last Friday is having follow-up

    Gold and silver

    GLD closed up. SLV closed down. From a Dow Theory perspective, nothing has changed (all my GLD inventory talk notwithstanding) and, hence, the primary and secondary trend remains bearish.

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

    As you can see investing along the primary trend of the market can be boring (but fruitful long term) as many days pass by without a change in trends. However, such lack of action gives us time to study the markets and become better investors.


    The Dow Theorist

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