Monday, July 8, 2013

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

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