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 July 8: Stocks Closed Up. Primary Trend Remains Bearish  0 comments
    Jul 8, 2013 4:39 PM | about stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL

    Richard Russell on the importance of market timing

    Richard Russell, of the "Dow Theory Letters", recently nailed it when he wrote

    "And it's also a matter of timing. The graveyards of Wall Street are filled with brilliant men who were right too soon."

    I couldn't say it better in so few words. What separates winners from losers in all walks of life is "timing". Many "winners", while not aware of their own timing (and even despising "market timers"), are winners because they were in the right time at the right place. Some successful fundamental investors who abhor technical analysis come to my mind.


    The SPY, Industrials, and Transports closed up.

    The primary trend and secondary trend is bearish for the reasons explained here, and further explained here.

    Today's volume was higher than Friday's, which is bullish as volume grew in unison with higher prices. We have had two consecutive days of bullish volume, which renders the overall pattern of volume less bearish. However, it is still too early to label volume as bullish or even neutral.

    Gold and Silver

    SLV, and GLD closed up. The primary trend is bearish, as explained here and reconfirmed bearish here; the secondary trend remains bearish too.

    GDX and SIL, the gold and silver miners ETFs closed down. The primary trend is bearish, as explained here and reconfirmed bearish here; the secondary trend remains bearish too.

    For those investing along the primary trend, as defined by the Dow Theory, the precious metals' action is becoming kind of boring. Days go by, and there is no change in trends. However, what makes trends is the persistence of prices to go in one direction. Nobody said that successful investing (i.e. avoiding the devastating bear market in precious metals) had to be fun or exciting. However, we must keep an eye on the markets every day.

    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

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