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Dow Theory Update For July 2: Deflationary Forces In Action

|Includes:DIA, GDX, GLD, IYT, SIL, SLV, SPDR S&P 500 Trust ETF (SPY)

Precious metals and stocks closed down

Today is going to be a short Dow Theory commentary, as there are no relevant events.

Stocks

The SPY, Industrials, and Transports closed down.

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

Today's volume was higher than yesterday's, which has a bearish connotation as volume expanded with declining prices. The overall pattern of volume is bearish for the reasons explained here. Here you have a chart that shows lots of red arrows (bearish). You can notice that the last six days (3 "up" and 3 "down) have been bearish volume days, which resulted in 6 red arrows. Volume contracts in up days and expands in down days. The updated chart below shows clearly that the trend of volume is clearly bearish: Ascending when prices decline and descending when prices rally.

 

 

I repeat myself ad nauseam: Volume is bearish.

Gold and Silver

SLV, and GLD closed down. 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.

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.

Sincerely,

The Dow Theorist

Stocks: SPY, DIA, IYT, GLD, SLV, GDX, SIL