Welcome to the world of Dow Theory Analysis SAC – a company dedicated to the production and distribution of accurate, reliable analysis as it relates to financial and equities markets. We are a small privately held company duly constituted and established in Lima, Peru. The staff at Dow Theory Analysis’ has been performing market related analysis for more than twenty years. We serve you by fulfilling one purpose and one purpose only: we do unbiased market analysis for our own account as well as anyone willing to pay for our services.
We established Dow Theory Analysis SAC in Peru for geological reasons. It just so happens that Peru is one or the world’s largest exporters of mineral. This ties in very well with our specialty which just happens to be precious metals, specifically gold and silver. One of the best gold mines in the world, Buenaventura (BVN), just happens to be located in Peru and the list of foreign entities engaging in exploration in Peru reads like the “Who’s Who” of mining. In fact, we dealt solely with metals related analysis until 1998. In late 98’, we began to focus our attention on the equities bubble building in the United States. As a result, we focused attention on the S & P 500 Index, the Transportation Index, and the DJIA Index. After more than a year’s worth of studying, we advised our clients to sell short the S & P in May of 2000. Since then we have been heavily involved in the analysis of the three major indexes commonly associated with the U.S. markets.
When you log on to our website, you are asking us for investment advice. The advice can be either right or wrong, and chances are you may receive both at the same time. We don’t “know” what the market is going to do, no one does, and if we did we probably would be too busy making money to write about it. We guess just like every one else, but before we guess we try to shift the odds in our favor. Through thoughtful, accurate analysis we hope to gain an edge and win more than we lose. We don’t care if we are long or short, but we do care why we are one way or the other. We will give you bad investment advice; there is no way around that. Obviously if we want to stay in business, we also have to give you some good advice and have a positive track record over the long run. We have little or no interest in the short run. Unlike the famous economist, John M. Keynes, we are not planning to die in the long run. We want to make our money by identifying the beginning of primary trends, be they Bull or Bear market trends, that will have a duration that can be counted in years and not days or weeks. Once a particular Primary trend is identified, we want to our clients to take a position as close to the beginning of the trend as possible and then just “sit tight”.
As we stated before, we want to make money in all types of markets, but we believe we’ll have the greatest opportunities in down markets. Why? Bear markets involve the element of fear. Fear sets in faster than greed (an element found in Bull markets), increases volatility, and that allows you to rack up profits at an accelerated pace. Conversely, put yourself on the wrong side of a trade in a down market and you’ll lose money faster than you ever thought possible.
We tend to focus our attention on the futures markets, specifically the S & P and the DJIA futures contracts. Likewise, we spend a lot of time studying the price action of the gold and silver futures contracts. Additionally, we follow currencies, cotton, oil, the CRB Index, lumber and the grain complex. With the exception of a few gold, silver, and oil companies we have little interest in purchasing stocks. In our opinion, it is easier to predict the primary trend of the DJIA than it is to divine the direction of a particular stock. Here’s an example: Enron is bankrupt but the energy sector, especially oil, is doing just fine. If you want a stock-picker, you would be better off to look elsewhere. Finally, you should know that we base our analysis on a mixture of Gann, Fibonacci, weekly and monthly chart observations, and Value Theory. The latter rules the roost as far as we are concerned. In order to take the long side of any trade, we must see considerable value. Inversely, there must be a considerable lack of value before we take the short side.
Now let’s talk a little bit about our services. If you are interested in subscribing to the Dow Theory Analysis newsletter and other related services, you need to be aware of three things. First, we publish an extensive Newsletter on a monthly basis dealing with the economy, politics, and specific markets. Additionally, we will give you specific recommendations with respect to the DJIA, gold, silver, etc.,… and we will tell you what positions Dow Theory Analysis will take and why. We will present our reasons in a language anyone can understand. Analysis isn’t worth the paper it’s written on if you can’t make heads or tails out of it. Secondly, we will send out special reports that examine a specific commodity or small group of stocks. An example could be cotton or the CRB Index. Finally, we will send out Daily Updates that summarize the previous day’s action and highlight and warning signs that may not have been present before. Naturally, we do not work for free. We charge US $ 30.00/month or US $ 300.00/year. A client can subscribe for three months, six months, or one year. Institutional clients will pay a different rate that will be negotiated at that point and time. Should you have any questions, feel free to contact us at ebo@dowtheoryanalysis.com and we will respond as soon as possible.
Enrico Orlandini
Economist
Dow Theory Analysis SAC
Lima, Peru
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