Answer: Jack Schannep of "thedowtheory.com"
The article begins with a pearl of common sense. I quote:
"The best-performing advisers who focus on calling market turns are giving the bull market the benefit of the doubt. The worst performers aren't."
Sometimes the obvious tends to be overlooked. Trends should be given the benefit of doubt. Market adages such as "don't find the trend," "the trend is your friend" are the distillates of the aggregate experience of market participants over many years. Trends do exist, and to the academics' dismay, prices are not random. Empirically trends exist. And aprioristically it makes full sense for trends to exist. Success tends to beget success, and failure begets failure. A good country is more likely to get better in the near future than to get worse. A successful company is more likely to continue successful than to blow up without prior notice. The odds favor that a good student will continue to outperform laggards or those playing hooky in the near time. Of course, there can always be exceptions. A successful company can unexpectedly disintegrate; a successful student can suddenly suffer one stroke. This is why trends eventually die, but until they end, the odds clearly favor that success, and failure will continue. Trends are a fact of life.
Those still skeptical are well advised to read Michael Covel's book "Trend Following." The book provides a wealth of information as to the existence of trends.
This is why, even though, I share with Dow Theorist Russell many concerns about the economy, and I am bracing myself for a "reset," I also know that one should not ignore trends. Even if there is a "reset" we really don't know whether it would be negative for stocks. What if gold is suddenly repriced by the Western countries at a price of USD 10, 000? Wouldn't this be inflationary and benefit stocks? I really don't know. However, what I do know is that trends deserve, as Hulbert says, the benefit of doubt. Ignore them at your own peril.
The Wall Street Journal article finishes by saying that Schannep's timing system (which is Dow Theory, which is a subset of trend following) is one of the best market timers. According to Hulbert:
"An investor would have made a 10% annualized return over the past five years by using Mr. Schannep's market-timing models to switch between the Vanguard Total Stock Market ETF and a typical money-market fund. That is nearly double the 5.7% produced by buying and holding that index fund itself.
Even better, an investor following Mr. Schannep's signals would have incurred a third less volatility than the market itself, as measured by the standard deviation of his returns. Nearly doubling the market's gains with much less risk is a winning combination."
I am personally dissecting Schannep's performance under all possible angles. While the results from my research will be the subject of a new saga of posts, I can attest that Schannep's application of the Dow Theory has greatly outperformed buy and hold and even the "Rhea/Classical" Dow Theory by a great margin while reducing drawdowns in the last 59 years (since 1954). So Schannep's Dow Theory "flavor" outperformance is not an oddity (i.e. a "5 years oddity") but a clearly established fact.
Of course, praising Schannep, means praising the Dow Theory, even the "Rhea/classical" one.
The SPY and Industrials closed up. The Transports closed down. The primary trend is bullish, and the secondary one is bearish for the reasons given here.
The stock market remains in a delicate situation, even though, with today's bullish action, higher highs are a distinct possibility. If the June 5 lows were to be violated a primary bear market would be signaled, as was explained here. If the last recorded highs (05/21 for the SPY, 05/28 for the Industrials and 05/17 for the Transports) were broken out by at least two indices, then the primary bull market would be reconfirmed.
Today's volume was lower than yesterday's, which makes it a bearish volume day, as higher prices were not joined by expanding volume. The overall pattern of volume remains neutral.
Gold and Silver
GLD and SLV closed down. The primary and secondary trend is bearish.
GDX and SIL, the gold and silver miners ETFs, closed down The primary trend is bearish, and the secondary trend is bullish for the reasons explained here.
The Dow Theorist