Dow Theory Update for Feb 8: Waiting for a correction

Precious metals still weak.

Barry Ritholtz blog “The Big Picture” includes an interesting post today entitled “Majority Opinion About Equity Markets." He makes the point that markets can stay overbought longer than most can expect. This is precisely what we are currently witnessing in the stock market. Keynes said that markets can stay irrational longer than you can stay solvent. I’d add that markets can stay overbought longer than the average bear might expect.

While anything can occur, we should follow the trend. Until the Dow Theory tells us that the primary trend has turned bearish, we better refrain from fighting the trend.

The SPY, the Industrials and the Transports closed up. At the risk of repeating myself, I say that the primary and secondary trend remains bullish.

Volume was markedly lower than yesterday’s, which has a bearish connotation.

Gold (GLD) and silver closed lower. Until proven otherwise, both the primary and secondary trend remains bearish.

SIL (silver miners ETF) closed up. GDX (gold miners ETF) closed down. The primary and secondary trend remains bearish.

During this weekend, I will post a new article in this Dow Theory blog. It is the sequel of my post “How often does the Dow Theory outperform buy and hold?”, which you can find here.

 

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

 

Data for February 8, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		11/15/2012	135,7
Bull market signaled		01/02/2013	146,1
Last close		02/08/2013	151,8
Current stop level: Bear mkt low			135,7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
3,93%	11,86%	7,63%
DOW THEORY PRIMARY TREND MONITOR GOLD (GLD)
			GLD
Bull market started		05/16/2012	149,5
Bull market signaled		08/22/2012	160,5
Exit December 20		12/20/2012	161,2
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
Exit January 23		01/24/2013	21,69
Current stop level: Sec React low		11/15/2012	21,87
Realized Loss %	Tot advance since start bull mkt	Max Pot Loss %
-0,64%	26,99%	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
Exit January 23		01/24/2013	44,56
Current stop level: Sec React low		12/05/2012	45,35
Realized Loss %	Tot advance since start bull mkt	Max Pot Loss %
-6,72%	12,64%	20,75%

Sincerely,

The Dow Theorist