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Manuel Blay
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Investor and Trader As investor I'm deeply influenced by Dow Theory. I focus on the primary trend (1-2 years). My trading is short-term based (avg trade duration 4-5 days).
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Dow Theory Investment
  • Dow Theory Update For July 16: Primary Bear Market In Stocks Still In Force  0 comments
    Jul 16, 2013 5:21 PM | about stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL

    Stocks close down, and Transports fail to confirm

    Formidable article on Maulding Economics concerning what is really happening to gold

    I give you the link without further ado:

    http://www.mauldineconomics.com/ttmygh/what-if

    If you are serious about understanding current developments, you are encouraged to read it.

    However, as with any "fundamental" opinion, so should put it into a "secular" context, as explained in my post "Secular trend versus long term trend"

    Stocks

    The SPY, Industrials, and Transports closed down.

    As you can see from the chart below, the Transports have not bettered the last recorded highs (blue horizontal line) yet, and, accordingly, as explained here, no primary bull market has been signaled. The ellipse highlights the lack of confirmation.

     

     

    (click to enlarge)
    Transports (middle) refuse to confirm Industrials (top) and SPY (bottom) higher closing highs. The longer the non-confirmation persist, the higher the odds of a trend reversal

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

    The secondary trend is bullish, as has been explained here.

    Today's volume was higher than yesterday's, which is bearish as lower prices were joined by increasing volume. Yesterday was a bearish volume day too, as advancing prices saw retreating volume. Furthermore, I read on Zero Hedge that yesterday was the lowest volume day of the year.

    The overall pattern of volume is bearish, for the reasons given here.

    Gold and Silver

    SLV and GLD closed up. Gold bettered the its 07/11 closing high. SLV failed to confirm. 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 up. Furthermore, both ETFs bettered their 07/11 closing highs, which further confirms the ongoing secondary reaction. However, it is no time for fireworks yet. We won't get some glimpse of hope until the primary trend turns bullish. The primary trend is bearish, as explained here and reconfirmed bearish here.

    The secondary trend for GDX and SIL is bullish, as explained here.

    Here you have an updated chart of both ETFs, which clearly shows the secondary trend (blue rectangles):

     

     

    (click to enlarge)
    Secondary reaction against the primary bearish trend seems to consolidate

    Sincerely,

    The Dow Theorist

    Themes: Dow Theory Stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL
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