Thursday, June 6, 2013

Dow Theory Update for June 6: Stocks and precious metals closed up



 



Jon Strebler of the Dow Theory Letters continues bullish long term on stocks


Jon Strebler’s more recent article in the “Dow Theory Letters” is full of common sense, while, once again, he cautions that a hair-curling correction may be at hand, he reminds readers that we should give the current primary bull market the benefit of the doubt, and accordingly stay with stocks (or sell down a bit to your sleeping point).


On the other hand, in the very same “Dow Theory Letter”, Richard Russell continues ultra bearish and counsels unambiguously his readership to be out of stocks.

What my take on this? I feel Strebler is doing the right thing, which is applying the Dow Theory, and not trying to second guess it. I wrote more about Russell's position in this post on this Dow Theory blog.


Stocks

The SPY, Industrials and Transports closed up. The primary trend is bullish. The secondary trend is bearish, which implies that there is an ongoing secondary reaction against the primary bullish trend (both trends determined according to the Dow Theory as per Schannep’s “flavor”). You can read more about the secondary reaction here.
 
Today’s volume was lower than yesterday, which is bearish as the rally was 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 ETF, closed up. The primary and secondary trend remains bearish.

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

 

Data for June 6, 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
06/06/2013 162.67
Current stop level: Bear mkt low

135.7




Unrlzd gain % Tot advance since start bull mkt Max Pot Loss %




11.37% 19.87% 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

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