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Dow Theory Update For January 3: Strebler, Of The Dow Theory Letters, Nails It As To The Power Of Trends

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

Precious metals strong, but trends unchanged

Jon Strebler, Richard Rusell's associate at the "Dow Theory Letters" has recently nailed it down when he wrote: "Stocks can't continue this [going up] forever¸ but they can do anything they want for longer than you or I think they are irrational"

By the way, I like the way Strebler analyses the market. Furthermore, although sparingly, he uses from time to time the classical Dow Theory. It must be said that Strebler was on the right side of the market during 2013 for both stocks and precious metals.

US stocks

The SPY closed down, the Industrials and the Transports closed up and failed to break above recent highs.

The primary trend is bullish, as explained here, and more in-depth here.

The primary trend was reconfirmed as bullish on October 17th and November 13th, for the reasons given here and here.

Gold and Silver

SLV and GLD closed up. For the reasons I explained here, and more recently here, I feel the primary trend remains bearish. Here I analyzed the primary bear market signal given on December 20, 2012. The primary trend was reconfirmed bearish, as explained here. The secondary trend is bullish (secondary reaction against the primary bearish trend), as explained here.

As to the gold and silver miners ETFs, SIL, and GDX closed down. The primary trend is bearish, as was profusely explained here and here. Likewise, the secondary trend is bearish.

Later today, I will post a review of 2013 according to the Dow Theory. We will revisit all the Dow Theory-based market calls and how we have fared compared to buy and hold. It'll be a real tour de force, as you will have before your eyes one full year of market action.


The Dow Theorist