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Dow Theory Update For Feb 8: Waiting For A Correction

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

Precious metals still weak.

Barry Ritholtz blog "The Big Picture" includes an interesting post today entitled "Majority Opinion About Equity Markets." He makes the point that markets can stay overbought longer than most can expect. This is precisely what we are currently witnessing in the stock market. Keynes said that markets can stay irrational longer than you can stay solvent. I'd add that markets can stay overbought longer than the average bear might expect.

While anything can occur, we should follow the trend. Until the Dow Theory tells us that the primary trend has turned bearish, we better refrain from fighting the trend.

The SPY, the Industrials and the Transports closed up. At the risk of repeating myself, I say that the primary and secondary trend remains bullish.

Volume was markedly lower than yesterday's, which has a bearish connotation.

Gold (NYSEARCA:GLD) and silver closed lower. Until proven otherwise, both the primary and secondary trend remains bearish.

SIL (silver miners ETF) closed up. GDX (gold miners ETF) closed down. The primary and secondary trend remains bearish.

During this weekend, I will post a new article in this Dow Theory blog. It is the sequel of my post "How often does the Dow Theory outperform buy and hold?", which you can find here.

Sincerely,

The Dow Theorist