Dow Theory Update for March 12: Precious metals strongly up

 Stocks seem to take a breather.

Richard Russell cautiously recognizes primary bull market under the Dow Theory.

Richard Russell, of the “Dow Theory Letters” cautiously acknowledged that “being in the market is justified under Dow Theory” and even suggests a small position in the DIA. Thus, it seems that after seeing the all-time highs in the Industrials (which confirmed previous all-time highs made by the Transports), the only valid conclusion under the Dow Theory (of any flavor) is that a primary bull market is in force.

Of course, Russell is too experienced not to hedge his opinion, and, thus he rightfully says that he doesn’t like this market.

Stocks

The Industrials closed up. The SPY and Transports closed down.

Today’s volume was higher than yesterday’s. Thus, it was a bearish volume day as declining prices were met by expanding volume. The overall picture of volume remains bearish for the reasons stated here.

Gold and Silver

GLD lost yesterday 3.01 tonnes. Current holdings amount to 1236.73 tonnes. The bleeding continues, which is ominous, since prices little by little are going up. If past experience is to be repeated again, rising prices should stop the bleeding. Failure to do so may result in even higher prices. However, there is no need to jump the gun, since we are not in the business of calling exact bottoms. Let’s wait until a primary bull market is signaled in the charts.

GLD and SLV closed up. The primary and secondary trend remains bearish.

As to the gold and silver miners ETFs, GDX and SIL both closed up. The primary and secondary trend remains bearish.

The GDXJ/GDX ratio (gold junior versus gold miners ETF) shows that junior miners are displaying greater relative strength. This is a hint that a change of trend may be nearing. Normally, bear market conditions tend to afflict specially the juniors. Stronger juniors seem to suggest (if such strength continues) that the primary bear market may be in its death-throes. Here you have the chart. The red line shows the GDXJ/GDX ratio:

Junior gold miners are getting stronger. This is a bullish sign

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

 

Data for March 12, 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		03/12/2013	155.68
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
6.59%	14.72%	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
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.