Stocks closed up
Piece of wisdom of Gartman, as quoted by Richard Russell.
Richard Russell, of the Dow Theory Letters, has nailed it down. When trying to call a bottom in gold, he wrote:
"I'm going to be kind and say that gold has put in a base at 1350. I'm going to side with Dennis Gartman when I say, "I don't give a damn about manipulation, price is price, and gold just can't get started."
That's it! Be it because of manipulation, be it because of lack of demand paper gold is falling down. Why argue with price? Here Russell by siding with Gartman manifests a good deal of common sense.
However, such common sense should also have been applied to stocks when they were in the midst of the powerful the cyclical bull market that ended last week. If stocks had been going up, if the trend was up, Russell should have heeded the clear message that the stock market was sending. Paraphrasing Gartman, I'd say, "I don't give a damn about manipulation, price is price, and stocks were in a bull market" Even if the bull market was caused by manipulation, who cares? It is no secret that there are many vested interests in seeing a healthy stock market. The stock market has powerful endorsers, unlike gold. If stocks went up due to manipulation, or the FED, or for whatever reason, the truth is that there was more demand than supply. And this is all we should care, provided we are sure we are the rightful owners of the stocks we own (i.e. by avoiding margin accounts, unless one is a very short term trader).
The SPY, Industrials, and Transports closed up.
Today's volume was lower than yesterday's, which is bearish as ascending prices were not joined by raising volume. The overall pattern of volume is bearish for the reasons explained here. Here you have a chart that shows lots of red arrows (bearish). You can notice that the last two days of price advance have not been confirmed by volume, which has grown smaller and smaller.
|(click to enlarge)Click to enlarge|
|Volume expanded during the decline and contracted during the present rally: Text-book bearish action|
Gold and Silver
Eventually, one of these primary bear market re-confirmations will be proven false. In the meantime, it is better not to fight the trend, and wait for a primary bull market signal in order to make a commitment on the long side.
The Dow Theorist