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