Manuel Blay

Manuel Blay
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  • Dow Theory Update For January 26: Secondary (Bullish) Reaction For Gold And Silver Against Primary Bear Market Signaled Today   [View instapost]
    No, I have not performed such tests.

    However, I am leerly when it comes to investing in debt instruments. One never knows what might happen. What if a sudden huge bear market in debt sets in? I prefer the safety of cash (provided the bank or brokers do not blow up, which is not a certainty) or t-bills
    Feb 2, 2016. 05:08 PM | Likes Like |Link to Comment
  • Dow Theory Update For January 26: Secondary (Bullish) Reaction For Gold And Silver Against Primary Bear Market Signaled Today   [View instapost]
    Not for me, the noise outweights the signal. Even my short term trading uses a Dow Theory filter based on the primary trend, not the secondary ones. However, gifted investors like Rhea were able to trade secondary reactions. I am not in such a league.

    thx for following
    Feb 2, 2016. 05:05 PM | 1 Like Like |Link to Comment
  • Dow Theory Review For 2015   [View instapost]
    Either I am not understanding properly, of there is an error of calculation in your comment.

    When factoring in dividends, you make the following calculation for the SPY when traded under the Dow Theory:

    Capl'zd Profits [+0.06%] + Div [+0.95%] = +0.25%

    I feel there is an error, as +0.06% + 0.95% equals 1.01%, not +0.25%.

    Thus, even when factoring in dividends (which favors buy and hold, over any timing device), the difference would be meager +1.28% (buy and hold) versus 1.01% (Dow Theory).

    Furthermore, your comment omits risk-adjusting. Even if we account for dividends, I rather prefer to make +1.01% (Dow Theory) with a maximum drawdown of ca. -4.5% than making +1.28% (buy and hold) with a drawdown of -12.30%. One might think that the -12.30% draw down of buy and hold is not important because it was temporary. The problem is that in real time nobody knows what will happen next. Is a real bear market looming? Hence, the Dow theory (and specially Schannep’s) does the sensible thing: In doubt, stay out. If, afterwards, it was just a scare, we will get our Dow Theory buy signal. And we know, that trades are sparse under the Dow Theory, and hence we will not be eaten out by commissions and slippage.

    This is very personal. For some investors drawdowns are immaterial. However, for many others, drawdowns are real, and tend to prompt the hapless investors to throw the towel at the bottom after the market has declined 30%, 40% or 50%. This is very subjective, but, at least, for me drawdowns matter.

    In any instance, I feel my annual review has been misunderstood. In any given year, anything can occur (this is like “trading”, the statistical advantage takes time to built up). I have written in the past that ca. 40% of the years the Dow Theory has underperformed buy and hold. The Dow Theory outperformance is precisely built up upon the years when buy and hold suffers huge draw downs. More about in which years the Dow Theory outperforms, here:

    http://bit.ly/1bUmRYs

    Sincerely,
    The Dow Theorist
    Jan 19, 2016. 11:31 AM | Likes Like |Link to Comment
  • Dow Theory Update For November 2: Gold, Silver And Their Miners ETFs Under A Secondary Reaction   [View instapost]
    Thx for following. Regards
    Nov 17, 2015. 06:36 PM | Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally  [View article]
    Technically, the gold and silver miners ETFs are in a primary bull market (unnoticed to many) since October 5, as explained here on SA:

    http://seekingalpha.co...
    Oct 9, 2015. 10:56 PM | 1 Like Like |Link to Comment
  • Don't Be Fooled: A Stealth Bull Market In Gold And Silver Is Underway  [View article]
    Technically, gold and silver are very close to signaling a primary bull market. The secondary trend is clearly bullish. Furthermore, the gold and silver miners ETFs, which tend to lead, are in a primary bull market (unnoticed to many) since October 5, as explained here on SA:

    http://seekingalpha.co...
    Oct 9, 2015. 10:52 PM | Likes Like |Link to Comment
  • Dow Theory Update For October 5: Primary Bull Market For Mining Stocks And Chinese Stocks Signaled Today   [View instapost]
    thx to you for being a faithful follower.
    Oct 8, 2015. 01:23 PM | Likes Like |Link to Comment
  • Dow Theory Update For August 19: Lessons Learned From The Chinese Stock Market Crash (I)   [View instapost]
    Good remark.

    Would the plunge protection team, QE, etc. still leave the US stocks market as a "free market"? I really don't know. This is stuff for one future post....

    On the other hand, "demand" is "demand" even if it comes from the Fed. I really don't know...

    thx for commenting

    Regards
    Aug 22, 2015. 06:25 PM | Likes Like |Link to Comment
  • Dow Theory Update For July 29: Lessons (Re)Learned From The Precious Metals Universe And Chinese Stocks   [View instapost]
    thx for following
    Aug 5, 2015. 12:34 PM | Likes Like |Link to Comment
  • Dow Theory Update For April 21: Dow Theory, Trend Following, Noise And Non Parametric Systems   [View instapost]
    Algyros,

    I tried to follow your suggestions. I have made changes on my blog so now you can see my reading of the primary and secondary trend at a glance.

    http://bit.ly/1PGxGK3

    Regards
    May 13, 2015. 10:34 AM | Likes Like |Link to Comment
  • Dow Theory Update For April 21: Dow Theory, Trend Following, Noise And Non Parametric Systems   [View instapost]
    My "flavor" of the Dow Theory is that of Schannep. My blog has documented extensively not only Schannep's performance but, more importantly, how and why it outperforms the classic Dow Theory, which, in itself is a wonderful trend following tool.

    http://bit.ly/1bUmRYs

    http://bit.ly/1bUmRYx

    I try to avoid posting in an "easy" way current state of the trend, as we have to learn to think by ourselves. However, in many posts I explain the current status of the primary and secondary trend. The last one here:

    http://bit.ly/1bUmRYz

    Thx for following.
    Regards.
    Apr 29, 2015. 11:52 AM | Likes Like |Link to Comment
  • Dow Theory Special Issue: Dissecting The Classical/Rhea Dow Theory Record   [View instapost]
    Thx for the comment.

    Two brief observations:

    A) Total returns

    I feel that if we include dividends, we should also include them for the followers of the Dow Theory too.

    Since the Dow Theory is roughly 2/3 of the time “in the market”, a fair amount of dividends will accrue to the Dow Theory investors (not included in my study). Thus, we should make “apples to apples” comparisons. If we include dividends for the passive buy and hold, then we should include ca. 2/3 of dividends for those following the Dow Theory. If we included them, we would certainly see the Dow Theory performance increase by a huge measure.

    If you have the time, I’d be extremely thankful if you could include a dividend calculation to the Dow Theory (classical) record. We would all be astonished. I will give you credit for the results.

    B) Risk.

    Returns should be coupled with risk. When it comes to risk, we should bear in mind that the Dow Theory does an excellent job at keeping it at bay. However, as you say, “no individual investor has the same time frame to invest”. Most individual investors lack either the psychological fortitude or the financial means (need to tap on equity at the bottom of the drawdown) to survive the drawdowns inherent with any buy and hold approach

    Regards
    Manuel
    Feb 28, 2015. 12:24 PM | Likes Like |Link to Comment
  • Daily State Of The Markets: The Problem Are The Five Es  [View article]
    By the way, I greatly appreciate your work. My hall of fame is very reduced (maximum 7-8 names), you and Schannep rank highest in my hall of fame. I have followed your work for the last 2 years and I find more value in the free area of your website than in many subscriber services (Schannep excluded, he also delivers value).

    If it is a failed signal (the Dow Theory has its small share of losers too), then it was a scare.

    If the signal is not failed then I fear it is something more grizzly as you rightly say.
    Oct 16, 2014. 10:27 AM | Likes Like |Link to Comment
  • Stocks finish well off intraday lows, but still ugly  [View news story]
    Stocks are in a primary bear market since October 10, as explained here on SA:

    http://seekingalpha.co...
    Oct 15, 2014. 10:56 PM | 1 Like Like |Link to Comment
  • Daily State Of The Markets: The Problem Are The Five Es  [View article]
    While the current decline not reaching (yet) the "magic" threshold of -20% doesn't strictly quality as a bear market, according to my interpretation of the Dow Theory (which is not anchored on a hard-and-fast number such as -20%, but rather technical patterns), stocks are in a primary bear market since October 10th.

    Primary bear markets (even though they have been signaled well before the -20% threshold has been reached), as spotted by the Dow Theory, tend to have long legs. While nobody knows the future, and it could be a failed signal (a ca. 30% probability), technically something ominous has happened as explained here in SA:


    http://seekingalpha.co...

    All in all, under a Dow Theory standpoint, the well-established Dow Theory record tells us that lower prices are a distinct possibility for the weeks and even months ahead.
    Oct 15, 2014. 10:53 PM | Likes Like |Link to Comment
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