Dow Theory Update for April 4: Stocks rebound on bearish volume

Trends remain unchanged

Jon Strebler and the Dow Theory Letters

As I reported here Jon Strebler joined forces with Richard Russell, of the Dow Theory Letters some weeks ago.

My preliminary take on him (positive) has been confirmed as new “Dow Theory Letters” get published.

I like Strebler's humble and no-nonsense approach. His latest message to investors is that flirting from one investment strategy to the next is a sure recipe to the alms-house. Value investors should remain value investors and followers of the Dow Theory should remain Dow Theorists. As Strebler rightfully notes, buying a stock because it is good value and selling it because the Dow Theory has turned bearish can be devastating to one’s wealth. As to his take of the current state of the stock market, he is bullish or, more exactly, his interpretation of the Dow Theory shows him the existence of a primary bull market.

Stocks

The SPY, Industrials and Transports closed up. The primary and secondary trend remains bullish as per the Dow Theory.

Volume contracted today, which makes it a bearish volume day as advancing prices were not supported by expanding volume. As I wrote yesterday, the overall patter of volume is bearish and makes a secondary reaction more likely to occur.

Gold and silver

GLD and SLV closed strongly up. However, as one swallow does not make a summer, so one day “up” doesn’t make a bullish trend, not even one of secondary import. Accordingly, the primary and secondary trend remains bearish.

As to the gold and silver miners ETF, GDX and SIL, both closed strongly up. Accordingly, the primary and secondary trend remains bearish.

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

 

Data for April 4, 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		04/04/2013	155.86
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
6.71%	14.86%	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