Dow Theory Update: Indistinct day on low volume
The Industrials and Transports closed slightly down, and the SPY closed unchanged. Unrealized gains continue mounting (please mind the word "unrealized") and near 9% for the position that was initiated on July. I would welcome a secondary reaction right now, as it would help us raise our Dow Theory stop and lock in some profits. More about such stop here.
I see that Chinese stocks (FXI and HAO ETFs) are undergoing a secondary reaction against the primary bullish trend (which was signaled on September 12, 2013 on this Dow Theory blog)
Look at the chart below and you will see the orange rectangle highlighting the ongoing secondary reaction against the primary bullish trend.
I feel Chinese stocks might be telling us that US stocks could be nearing a secondary reaction. Furthermore, we better monitor the evolution of Chinese stocks the following days, as they could be setting up for a primary bear market signal. We are not there yet; but it is worth to keep an eye on them. In the meantime, the primary trend remains bullish (albeit much less convincing than that of US stocks).
Gold and Silver
SLV and GLD closed up. There has been five consecutive "up" closes, albeit it has not been enough to change our trend readings. Accordingly, for the reasons I explained here, and more recently here, I feel the primary trend remains bearish. 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.
The Dow Theorist