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Manuel Blay's  Instablog

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 October 25: SPY Makes Higher Highs Unconfirmed  0 comments
    Oct 25, 2013 4:43 PM | about stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL
    Trends remain unchanged

    Let's get started with our Dow Theory commentary for today in this blog.

    US stocks

    The SPY and Industrials closed up. The Transports closed down.

    The primary trend is bullish, as explained here, and more in-depth here.

    The primary trend was reconfirmed as bullish on October 17th, for the reasons given here.

    Today's volume was lower than yesterday's, which is bearish, as higher prices did not attract more volume. I consider volume to be bearish for the reasons given here and here. Furthermore, the trendline of volume of the last few days is ominously bearish, as volume has steadily contracted as prices advanced. Here you have an updated chart:

     

     

    (click to enlarge)
    Volume is bearish short term

    Gold and Silver

    SLV closed down, and GLD closed up. For the reasons I explained here, and more recently here, I feel the primary trend remains bearish, all the recent strong action notwithstanding. Here I analyzed the primary bear market signal given on December 20, 2012. The primary trend was reconfirmed bearish, as explained here. The secondary trend is bullish (secondary reaction against the primary bearish trend), as explained here.

    Here, I explained that GLD and SLV set up for a primary bull market signal. However, a setup is not the same as the "real thing," namely the primary bull market; thus, many "setups" do not materialize and until the secondary reaction closing highs are jointly broken up, no primary bull market will be signaled.

    SIL and GDX closed up. SIL and GDX, unlike GLD and SLV, are in a primary bull market under the Dow Theory, as explained here and here.

    The secondary trend is bearish, which is tantamount to saying that there is an ongoing secondary reaction against the primary bullish trend, for the reasons given here.

    Sincerely,

    The Dow Theorist

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