Dow Theory Update for Jan 7: Weakness prevails

Stocks and precious metals down

 

Let’s get started with our Dow Theory commentary for today.

The SPY, Industrials and Transports closed down. The primary trend and secondary trend remain bullish. More about the primary trend bull market signal here and here

 

Volume was down today, since it was a down day, the downward price action was not supported by volume, hence making it a bullish day. Furthermore, we see that the last rally of the lows was supported by volume (volume expanding with price) whereas volume is contracting during the incipient consolidations we are currently seeing. I'd label this action as bullish. Here you have an update snapshot of the volume patterns. Red arrows denote a bearish volume day whereas blue arrows denote bullish volume days.

Volume slightly bullish short term

Gold and silver closed down today. They are close to the primary bear market lows. We should remember that as per the Dow Theory, the primary trend is bearish so declining prices are more likely in the near term. More about the primary bear market signal in gold and silver here

SIL and GDX (the gold and silver miners ETF) closed down today. The primary trend remains bullish, and the secondary trend remains bearish.

Here you have the figures of the markets I monitor for today:

 

Data for January 7, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		11/15/2012	135.7
Bull market signaled		01/02/2013	146.06
Last close		01/07/2013	145.97
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
-0.06%	7.57%	7.63%
DOW THEORY PRIMARY TREND MONITOR GOLD (GLD)
			GLD
Bull market started		05/16/2012	149.46
Bull market signaled		08/22/2012	160.54
Exit December 20		12/20/2012	161.16
Current stop level: Sec React low		11/02/2012	162.6
Realized Loss %	Tot advance since start bull mkt
0.39%	7.83%
DOW THEORY PRIMARY TREND MONITOR SILVER (SLV)
			SLV
Bull market started		06/28/2012	25.63
Bull market signaled		08/22/2012	28.92
Exit December 20		12/20/2012	29
Current stop level: Sec React low		11/02/2012	29.95
Realized gain %	Tot advance since start bull mkt
0.28%	13.15%
DOW THEORY PRIMARY TREND MONITOR ETF SIL
			SIL
Bull market started		07/24/2012	17.08
Bull market signaled		09/04/2012	21.83
Last close		01/07/2013	22.19
Current stop level: Bear mkt low			17.08
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
1.65%	29.92%	27.81%
DOW THEORY PRIMARY TREND MONITOR ETF GDX
			GDX
Bull market started		05/16/2012	39.56
Bull market signaled		09/04/2012	47.77
Last close		01/07/2013	44.48
Current stop level: Bear mkt low			39.56
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
-6.89%	12.44%	20.75%

Sincerely,

The Dow Theorist