Dow Theory Update for June 3: Precious metals still trapped in primary bear market in spite of hopefull signals flashed by the miners

Transports fail to rally

 

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

The SPY and Industrials closed up. The Transports closed down. No index has been able to break above the most-recent  highs. However, it is too early to declare the existence of a secondary reaction for the reasons explain on last Friday’s post on this Dow Theory blog.

Today’s volume was lower than Friday’s, which is bearish as higher prices were not confirmed by expanding volume. The overall pattern of volume is bearish.

Gold and Silver

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

GDX and SIL the gold and silver miners ETFs, closed up. The miners are showing more relative strength than their respective precious metals of late. This might be indicative of an itermediate bottom for gold and silver. While not shown here, SIL is displaying greater relative strength than SLV as well. Here you have an updated chart for GDX/GDL ratio chart. A declining red line (the ratio) implies that the miners are stronger than gold. 

While still to early to jump the gun, GDX greater relative strength favors GLD

 

I also detected that GDXJ (the junior gold miners) is showing more relative strength than GDX (the senior gold miners), which might be indicative of a greater risk appetite and tends to be bullish for both the miners and the gold itself. Here you have the GDXJ/GDX ratio chart. An ascending red line (the ratio) implies that the junior miners are stronger than the seniors. Stronger juniors tend to be supportive of the whole gold-mining  universe.

Junior gold miners stronger than their senior peers, which is bullish for all gold miners and at the same time for gold

 

However, I lend more credence to the very trend of prices (not that of ratios), and, until now, it is bearish for the entire precious metals' universe. The primary and secondary trend for the miners remains bearish.

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

 

Data for June 3, 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		06/03/2013	164.35
Current stop level: Bear mkt low			135.7
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
12.52%	21.11%	7.63%
Alternative Schannep's stoploss:
Highest closing high		05/21/2013	167.17
16% stoploss from highest closing high			140.42
		Max Pot Loss %
		-3.86%
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.