New Dow Theory Position

I recently went to an electronics retailer in search of “noise canceling headphones” for my iPod. You know, the kind you see people wearing on the airplane – they “cancel” out any ambient noise (my wife calls them “Sarah canceling headphones”). When you put them on you feel like someone shut the door on a noisy party next door. It makes you focus on the topic at hand. In my case I use the iPod mostly for audiobooks and it makes a big difference.

It made me think: “What if we had noise canceling headphones for the markets?”.  Often times, that’s what Dow Theory feels like to me. It cuts through the clutter of the day to day noise in the financial press and gives you an objective answer as to the primary trend of the market. Beyond a doubt the biggest question I get lately is “Is the Bear market over?”  I’m going to give you the answer in this post. But first a refresher:

1. Dow Theory provides us with a binary answer. That means it’s either 1 or 0. There is no room for interpretation. The “noise” as it were, is cancelled out. A “BEAR” signal is in force until such time as a “BULL” signal has been given. Think of the light switch in your kitchen. Once you turn the lights OFF, you can’t turn them OFF again until you turn them ON. There is a lot of bad information on the web about Dow Theory, including some high priced subscription letters that have made many mistakes in the last two weeks interpreting this exact situation.

2. Charles Dow, writing over 108 years ago, used only daily closing prices. An intra-day high is just more noise that is canceled out. The reason is that Dow felt that a closing price trumped all other intra-day prices because it represented a price that traders and investors were happy to carry home overnight. This showed more of a commitment.  This is important as you will see below.

Now I’m going to give you the answer. As you can guess from the image on this post, we are still in a BEAR market. That’s because the last unique Dow Theory signal was a SELL signal way back in November of 2007. That’s right. The light switch has been OFF since November 2007. We are waiting for a Dow Theory BUY signal if and only if the markets can better their most recent secondary reaction highs. What does that mean? That’s technical mumbo jumbo for “the market has to make higher highs and higher lows”. There’s no doubt that the Dow Industrial stocks have done this. They have bettered the May peak by a good margin. However, Dow required the two indicies to confirm each other. The Transport stocks have stubbornly NOT confirmed the high in the Dow Industrials.   The daily close that we need for a Dow Theory BUY signal is a higher close on the Transportation Average of 3404.11.  Above I stated closing prices were important.  That’s because two weeks ago the Dow Transports were on the verge of giving a signal intra-day, and then reversed and closed lower and therefore failed to “flip the switch” to ON.  Let’s look at a chart to see what I mean:

Dow Theory 24 June 09

The point I am trying to impress upon you is that the Dow Transportation stocks may “know something” that the Dow Industrials don’t.  The failure of the Transports (lower high in June than in May in lower box above) signals a divergence in the indicies.  William Hamilton, Dow’s understudy, warned of such divergences in the indicies as potential danger spots.

New Dow Theory Position

JANUARY 9th, 2009 –

The Florida Gators won the national college football championship this week. They won it on defense. Coming into the game, the prolific Oklahoma sooners wowed everyone with five straight games of putting up 60 points or more. They hadn’t, however, encountered a defense like the Gators. The Gators shut down the Sooners with their stiffling defense and held them to a stingy 14 points.

The point is that the old saying “defense wins championships” is just as true in the investment world as it is in the football world. You have to defend your investment account from your opponent – in this case the bear market. The year 2008 was a great example of winning using defense, or as you’ve heard me say “winning by not losing”. Take a look at the returns accross the globe in 2008:

Dow Industrials -34.7%

Teilweise neues Material von Shawn Porter aka Bloodysnowman, teilweise Remixe seines selbst betitelten Debüts, vor allem aber ein tiefer Einblick in die Mentalität der Freaks rund um und auf dem Label Daly City. Das ist „Bloody Buddies“.

Zwischen purem Breakcore und poppig-tanzbarer Electronica findet sich vieles auf dem neuesten Output des in Oakland, California ansässigen Labels Daly City. Allem jedoch ist gemein: Die Künstler von Mochipet bis Heartworm bewegen sich an der vordersten Front elektronischer Musik, was die Qualität des Outputs anbetrifft. Im Zentrum steht häufig – vielleicht sogar zu häufig – das Augenzwinkern, doch nie wird die Hörbarkeit vergessen – hörbar für den an elektronischer Seltsamkeit interessierten Nutzer, wie den Schreiber dieser Zeilen.

Mochipets „Bloody Dancer“ eröffnet das Album hypnotisch-flirrend und mitreißend auf gebrochenen Beats, bevor Bloodysnowman mit „Happy Fun Time“ klarstellt: Auch Electropop für den nächsten Rave ist hier möglich. Überhaupt sind es Shawn Porters eigene Stücke „Happy …“, „Laughing“ und „Broken Floor“, die hier am meisten überzeugen und mitreißen. Mit dem nötigen Pop-Appeal und der verbundenen Tanzbarkeit entwickelt er perfekte Tanzflächenfüller, die neben Momenten zum Ausrasten immer auch Ruhephasen beinhalten.

Höhepunkte herauszugreifen fällt schwer. Mag Build 128s „Dead Laptop (Raver for Sale)“ in seiner einen Minute Spielzeit fast zu zerstört daherkommen, hat es doch auch grandiose Momente. Ebenso die Überraschung des Albums, Xiu Xius Interpretation des „Dead Raver“ im „Shhhhhhh Mix“. Kaum mehr als vierminütiges Rauschen, doch verstehen Cory McCullough und Yvonne Chen damit zu faszinieren. Daneben und neben Bloodysnowman selbst begeistern vor allem Ben Sandovals „Dead Raver Still Dead“ und Yoko Solo mit „DRINKINGindaBUSHES You Whore!“. Das eine perfekter Electro-Funk, das andere jazziger Breakcore.

Bei aller Verwirrtheit und elektronischer Zerstörtheit des Albums zeigen diese „Bloody Buddies“ doch vor allem: Echter Mut, musikalische Verwegenheit findet heutzutage vor allem im elektronischen Halbfeld der Musik statt. Des Weiteren beweist Bloodysnowman hiermit aber auch, wie hörbar ein solcher Mut doch daherkommen kann. Hörbar sowohl im Sinne von interessant als eben auch im Sinne von poppig.

Estimados,
hoy os presento un disco de colaboración en donde la banda Xiu Xiu se junta con múltiples nombres grandes y realiza una mezcolanza de temas. Los caloboradores son: To Live and Shave in L.A. (Tom Smith), Her Space Holiday, Larsen, Oxbow, Sunset Rubdown, Marissa Nadler, Good For Cows, kid606, XO Skeletons, Gold Chains, Devendra Banhart, Warbucks, Cherry Point, and Grouper.

Este mismo grupo ha sacado este año otros 2 discos de colaboración (¿Spichiology? y A Soundtrack for a Polaroid of Two Trees In Indiana), además de un EP (Jamie Stewart Pre Xiu Xiu picture disc) y el año que viene sacarán el disco “Women As Lovers”. Por eso nos encontramos con un grupo de múltiples facetas y con una increible capacidad de generar riqueza musical (desde el 2002 tienen 8 albums).

El grupo tiene se base en San Francisco, California, y a veces en Seattle. Su música incorpora todo tipo de estilos (punk, noise rock, ambient noise, folk…) y tiene un lider indiscutible: Jamie Stewart. Sus principales influencias son ‘The Cure’ y ‘Joy Division’.

“Xiu Xiu es una banda de indie rock experimental originaria de San Jose (California), pero establecida en Seattle (Washington). Es un proyecto que partió de una idea del cantautor Jamie Stewart, quien ha sido el único componente que ha permanecido en la banda desde su formación. El resto del grupo lo forman su prima, Caralee McElroy, y el percusionista experimental Ches Smith (7 Year Rabbit Cycle, Good for Cows, Mr. Bungle). En ocasiones son acompañados por Cory McCulloch. Por sus filas han pasado músicos tales como Lauren Andrews, Yvonne Chen, Sam Mickens y Jherek Bischoff. Algunos de ellos, incluido McCulloch, habían tocado junto a Stewart en bandas anteriores como Ten in the Swear Jar y IBOPA. El nombre del grupo fue tomado de la película, Xiu Xiu: The Sent Down Girl de la directora china Joan Chen.”

Grupo: Xiu Xiu
Disco: Remixed and Covered
Año: 2007
Web oficial: http://www.xiuxiu.org/ y http://www.myspace.com/xiuxiuband
Canción: Apistat Comander (con Sunset Rubdown), Clowne Towne (con Marissa Nadler), Mouse Toy (con Larsen) y Saturn (con Oxbow)

Yes, this is my first post. (My Dad did it for me)

I’m Xíu, that the nick name my Dad gave me. I’m now just almost one month old

This is my pleasure to be in this World! And of course it’s great happiness for my parents and for the whole family.

Hello World! Why this is always the first word?