Dow Theory Update for July 8: Stocks closed up. Primary trend remains bearish

 Richard Russell on the importance of market timing

Richard Russell, of the “Dow Theory Letters”, recently nailed it when he wrote

“And it's also a matter of timing. The graveyards of Wall Street are filled with brilliant men who were right too soon.”

I couldn’t say it better in so few words. What separates winners from losers in all walks of life is “timing”. Many “winners”, while not aware of their own timing (and even despising “market timers”), are winners because they were in the right time at the right place. Some successful fundamental investors who abhor technical analysis come to my mind.

Stocks

The SPY, Industrials, and Transports closed up.

The primary trend and secondary trend is bearish for the reasons explained here, and further explained here.

Today’s volume was higher than Friday's, which is bullish as volume grew in unison with higher prices. We have had two consecutive days of bullish volume, which renders the overall pattern of volume less bearish. However, it is still too early to label volume as bullish or even neutral.

Gold and Silver

SLV, and GLD closed up. The primary trend is bearish, as explained here and reconfirmed bearish here; the secondary trend remains bearish too.

GDX and SIL, the gold and silver miners ETFs closed down. The primary trend is bearish, as explained here and reconfirmed bearish here; the secondary trend remains bearish too.

For those investing along the primary trend, as defined by the Dow Theory, the precious metals’ action is becoming kind of boring. Days go by, and there is no change in trends. However, what makes trends is the persistence of prices to go in one direction. Nobody said that successful investing (i.e. avoiding the devastating bear market in precious metals) had to be fun or exciting. However, we must keep an eye on the markets every day.

Eventually, one of these primary bear market re-confirmations will be proven false. In the meantime, it is better not to fight the trend, and wait for a primary bull market signal in order to make a commitment on the long side.

Here you have the figures of the markets I monitor for today, which contain no changes, as we are flat.

 

Data for July 8, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		11/15/2012	135.7
Bull market signaled		01/02/2013	146.06
Exit June 21		06/21/2013	159.07
Current stop level: Sec reaction lows			161.27
Realized gain %	Tot advance since start bull mkt	Max Pot Loss %
8.91%	17.22%	None.
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