Bull market for the gold and silver miners ETFs (GDX & SIL) confirmed on 12/11/25

 

The melt up for precious metals continues

Overview: What was just a secondary reaction against the bullish trend turned out to be nothing, as higher confirmed highs by SIL and GDX have reaffirmed the primary bull market.

The trend in gold and silver is so powerful that their pullbacks didn’t even count as secondary reactions.

So, bullishness in the precious metals is pervasive.

General Remarks:

In this post, I  elaborate extensively on the rationale behind employing two alternative definitions to evaluate secondary reactions.

SIL refers to the Silver Miners ETF. More information about SIL can be found HERE.

GDX refers to the Gold Miners ETF. More information about GDX can be found HERE.

A) Market situation if one appraises secondary reactions not bound by the three weeks and 1/3 retracement dogma.  

As I explained in this post, the primary trend was signaled as bullish on 6/2/25.

Following the 10/16/25 highs for both SIL and GDX (Step #1 in the Table below), there has been a pullback until 11/04/25 (Step #2). Such a pullback meets the time and extent requirement for a secondary (bearish) reaction against the still-existing primary bull market.

The rally that started at the 11/04/25 (SIL) lows and lasted until 11/10/25 set up both ETFs for a potential primary bear-market signal (Step #3).

The rally continued higher until 12/11/25 when both SIL and GDX  surpassed their 10/15/25 closing highs.

The implications of the breakout of the 10/16/25 highs are as follows:

(a) the secondary (bearish) reaction against the bull market has been terminated; (b) the setup for a potential bear market signal has been canceled, and

(c) the primary bull market has been reconfirmed.

The table below contains the key prices and dates:

The chart below illustrates the latest price movements. The brown rectangles mark the secondary reaction against the primary bull market (Step #2). The blue rectangles indicate the rally (Step #3), positioning GDX and SIL for a potential bear market signal. The red horizontal lines show the secondary reaction lows (Step #2), where a confirmed break would signal a new primary bear market. Meanwhile, the blue horizontal lines highlight the last recorded bull market highs (Step #1), whose confirmed breakout reconfirmed the primary bull market.

So, now the primary and secondary trends are bullish.

B) Market situation if one sticks to the traditional interpretation, demanding more than three weeks and 1/3 confirmed retracement to declare a secondary reaction.

I explained in this post that the primary trend was signaled as bullish on 6/2/25.

The current pullback has not reached 15 confirmed days by both ETFs, so there was no secondary reaction against the bull market.

So, the primary and secondary trends are bullish under the “slower” appraisal of the Dow Theory.

Sincerely,

Manuel Blay

Editor of thedowtheory.com

 

The Principle of Confirmation Can Save Your Skin (V) / Example 5: Bitcoin’s breakup that was a bull trap

 

Applying the Confirmation Principle to Bitcoin

In four earlier analyses (HERE, HERE, HERE , and HERE ), I showed how the Principle of Confirmation works across U.S. stock indexes, bonds, crypto, and precious metals. In each case, the principle proved invaluable in filtering out false moves. The idea is simple but powerful: a breakout or breakdown that is not confirmed by a related index or asset is highly suspect and prone to failure.

Today’s case study takes us back to the world of crypto.

I consider Bitcoin the main asset, and Ethereum the second asset from which I seek confirmation.

The starting point is the primary bull market, signaled on 5/8/25. Following what appeared to be a normal secondary reaction against the bull market (brown rectangles in the charts below), there was a rally (blue rectangles) that completed the setup for a potential bear-market signal. However, many potential bear signals never materialize, as there is no confirmed breakdown of the secondary reaction lows (red lines).

The rally that started on 8/29/25 for Bitcoin and 9/25/25 for Ethereum brought Bitcoin to higher highs —above its 8/13/25 all-time highs —on 10/3 and 10/6/25 (horizontal green line), thus setting new all-time highs. Many jumped the bullish bandwagon.

However, Ethereum failed to confirm the higher highs, as it did not surpass its 8/22/25 highs.

Lack of confirmation was a yellow flag: The bull market was NOT reconfirmed. So, it was not the right time to add and buy more Bitcoin. The bull market was questioned with a big question mark.

After such an unconfirmed high, both Bitcoin and Ethereum fell precipitously and jointly pierced their respective 8/29/25 (Bitcoin) and 9/25/25 lows on 10/16/25 and 10/17/25, respectively, thereby signaling a new bearish trend. Please note that the breakdown was confirmed. So, no excuses not to declare a new bear market.

The chart below displays the whole drama:

So, Bitcoin’s breakup was a bull trap. Fortunately, ETHE’s refusal to confirm proved to be our shield.

Sincerely,

Manuel Blay

Editor of thedowtheory.com

 

Gold and Silver Miners ETF at a critical juncture: Setup for a potential Bear market signal completed on 11/10/25

 

Overview: The gold and silver miners ETF reached a make-or-break moment on 11/10/25. The setup for a potential bear market is complete, and the line in the sand has been drawn. Please mind the word “potential”. Only if the two read lines I show in the chart below are jointly pierced, the trend will shift to bearish.

Gold and silver are showing such strength that they have not even entered a secondary reaction. Therefore, their primary and secondary trends remain bullish.

General Remarks:

In this post, I extensively elaborate on the rationale behind employing two alternative definitions to evaluate secondary reactions.

SIL refers to the Silver Miners ETF. More information about SIL can be found HERE.

GDX refers to the Gold Miners ETF. More information about GDX can be found HERE.

A) Market situation if one appraises secondary reactions not bound by the three weeks and 1/3 retracement dogma.  

As I explained in this post, the primary trend was signaled as bullish on 6/2/25.

Following the 10/16/25 highs for both SIL and GDX, there has been a pullback until 11/04/25. Such a pullback meets the time and extent requirement for a secondary (bearish) reaction against the still-existing primary bull market.

The rally that started at the 11/04/25 (SIL) lows and lasted until 11/10/25 set up both ETFs for a potential primary bear-market signal.

Thus, a confirmed breakdown of the 11/4/25 closing lows (SIL at 62.2 and GDX at 68.28) would signal a new primary bear market.

The table below gives you the most relevant information:

The chart below illustrates the latest price movements. The brown rectangles mark the secondary reaction against the primary bull market (Step #2). The blue rectangles indicate the rally (Step #3), positioning GDX and SIL for a potential bear market signal. The red horizontal lines show the secondary reaction lows (Step #2), where a confirmed break would signal a new primary bear market. The blue lines highlight the bull market highs (Step #1) whose confirmed breakup would re-confirm the still-existing primary bull market.

So, now we have two options:

1. If GDX and SIL jointly break down their 11/4/25 lows (SIL at 62.20 and GDX at 68.28), a new primary bear market would be signaled.
2. If GDX and SIL jointly surpass their 10/16/25 highs (SIL at 79.85 & GDX at 84.44), the primary bull market would be reconfirmed, and the secondary reaction and bearish setup would be canceled.

So, now, the primary trend is bullish, and the secondary one is bearish.

B) Market situation if one sticks to the traditional interpretation demanding more than three weeks and 1/3 confirmed retracement to declare a secondary reaction.

I explained in this post that the primary trend was signaled as bullish on 6/2/25.

The current pullback has not reached 15 confirmed days by both ETFs, so there is no secondary reaction against the bull market.

So, the primary and secondary trends are bullish under the “slower” appraisal of the Dow Theory.

Sincerely,

Manuel Blay

Editor of thedowtheory.com

The Emperor’s Clothes Again

 

In our latest conversation, Andrew and I picked up right where we left off,  back in April, when I correctly called the market bottom. In this new interview, I’m not calling a top, since I still see room for the stock market to move higher. However, I’m now a more cautious bull: the rally since the April 8th lows has been torrid. At the same time, I don’t expect a full-fledged bear market either.

I also shared the reasons behind my tempered optimism about the U.S. economy and the key factor that could still derail it.

https://thedisciplinedinvestor.com/blog/2025/11/09/tdi-podcast-the-emperors-clothes-again-946/

Sincerely,

Manuel Blay

Editor of thedowtheory.com

 

The Principle of Confirmation Can Save Your Skin (IV) / Example 4: Two Silver Breakdowns That Turned into Bear Traps

 

Applying the Confirmation Principle to precious metals

In three earlier analyses (HERE, HERE, and HERE), I showed how the Principle of Confirmation works across U.S. stock indexes, bonds, and crypto. In each case, the principle proved invaluable in filtering out false moves. The idea is simple but powerful: a breakout or breakdown that is not confirmed by a related index or asset is highly suspect and prone to failure.

Today’s case study takes us to the precious metals arena. Silver and gold—tracked through SLV and GLD—gave us two textbook examples of how confirmation can spare investors from costly mistakes. Both instances occurred within the same bull market, and in both cases a hasty reaction to silver’s weakness alone could have prematurely ended one of the most rewarding trades of the past decade.

First “fakeout” Breakdown: June 2024

The story begins with the bull market signaled on April 2, 2024 (details HERE).

After the 5/21/24 (SLV) and 5/20/24 (GLD) highs, both ETFs pulled back in what qualified as a secondary reaction. Lows were set on 6/13/24 (SLV at 26.43) and 6/7/24 (GLD at 211.6). A subsequent rally faltered, setting the stage for a possible bear market signal (full analysis HERE).

The “line in the sand” was clear: SLV had to hold 26.43, and GLD had to hold 211.6. A confirmed break of both would have killed the young bull market.

Then came the test. On 6/25/24, SLV dropped below its June low, closing at 26.40. GLD also appeared weak, but it never broke its 211.6 threshold. Without confirmation, no signal was triggered. What seemed like a breakdown turned out to be a trap, and the bull market continued.

Both metals soon proved the principle right. GLD posted new highs on 7/16/24, followed by SLV on 9/24/25.

Once again, unconfirmed breakdowns were exposed as false alarms.

This was the first “saving of our skin”, as the chart below shows. The brown rectangles highlight the secondary reaction against the bull market. The blue rectangles display the rally that set up both ETFs for a potential bear market. The red horizontal lines showcase the relevant pullback lows whose confirmed breakdown would have triggered a bear market. The grey rectangles show minor pullbacks that do not qualify as a secondary reaction.

Second “fakeout” Breakdown: November 2024

The script repeated—but with a twist. After October highs (SLV on 10/22, GLD on 10/30), both metals corrected again, carving out secondary reaction lows on 11/15/24 (SLV at 27.57, GLD at 236.59). Another weak rally fizzled, creating the setup for a new bear market signal (full analysis HERE).

The new critical levels were SLV 27.57 and GLD 236.59. On 11/27/24, SLV cracked support with a close at 27.25. But this time, GLD stayed comfortably above its low. Once again, no confirmation—no signal.

Silver drifted lower for a few more sessions, keeping traders nervous, before surging into a strong rally beginning 12/31/24. The bull case was sealed when GLD broke out on 1/30/25, and SLV followed on 6/5/25. The second “fakeout” had ended just like the first: with confirmation proving its worth.

This was the second “saving of our skin”, as the chart below shows. The brown rectangles highlight the secondary reaction against the bull market. The blue rectangles display the rally that set up both ETFs for a potential bear market. The red horizontal lines showcase the relevant pullback lows whose confirmed breakdown would have triggered a bear market. The grey rectangles show minor pullbacks that do not qualify as a secondary reaction.

Lessons Learned

In both episodes, silver alone signaled danger, but gold refused to confirm. In both cases, investors who relied solely on SLV’s movements would have been forced out of a profitable trade. However, by applying the Principle of Confirmation, the bull market remained intact and continued to be highly profitable both for SLV and GLD.

As we’ve already seen with stocks, bonds, and crypto, confirmation is more than just a Dow Theory curiosity. It’s a practical safeguard that prevents costly whipsaws and helps investors stay aligned with the true primary trend.

In upcoming posts, I will shift from case studies to data, demonstrating how the confirmation principle can be quantified and how significantly it enhances performance compared to single-index signals.

Sincerely,

Manuel Blay

Editor of thedowtheory.com

 

When Market Timing Meets Quant Research: The Results Speak for Themselves

 

How world-class quant research and timing filters slash drawdowns and boost returns.

 

What happens when you combine a strong stock-picking strategy with first-class trend following?
Something remarkable happens: returns surge, drawdowns shrink, and consistency improves dramatically. That’s exactly what the two charts below reveal.

This article was originally a brief social media post, but the conclusions drawn from the data were so compelling that I expanded it into a full blog entry.

The test covers the period from January 1, 2005, to July 25, 2025, with a 0.25% slippage applied to each side of every trade.

The stock-picking component focuses on identifying true value stocks — companies that are attractively priced and supported by solid earnings profiles.

When blending stock selection and market timing, everything must begin with a solid stock-picking foundation. The strategy should already outperform the benchmark (in this case, the S&P 500) and show a respectable Sharpe ratio on its own. Market timing can enhance results, but it can also disguise flaws — making a weak stock-picking system appear better than it really is. That’s why the underlying strategy must be robust by itself before adding any timing overlay. Once that’s in place, the combination of both becomes truly powerful: higher returns, smaller drawdowns, and far better risk-adjusted performance.

The table below summarizes the key performance metrics for the Quant + Market Timing strategy compared with the Quant-only version.

Even though the Quant-only strategy already beats the market, introducing a trend filter — a refined version of our Timing Indicators tailored to stocks — transforms the results. Performance takes off, drawdowns contract sharply, correlation with the S&P 500 falls (a welcome outcome), and the Sharpe ratio leaps higher.

The charts below display the Quant-only Strategy, and the Quant+ Market Timing Strategy. The red line showcases the stock picking strategy, and the blue one is Buy and Hold for the S&P500. The results speak for themselves:

 

So, when some still claim that market timing doesn’t work — or that those who practice it are misguided — the evidence tells a different story. The combination of disciplined quantitative research and systematic timing produces results that are too strong to dismiss.

Sincerely,

Manuel Blay

Editor of thedowtheory.com

 

Why Bitcoin’s Bull Market Isn’t Over Yet

 

On October 3rd, I had the pleasure of joining Maurizio Pedrazzoli Grazioli’s podcast for the second time. We picked up right where we left off from our previous conversation—when we called the bottom of Bitcoin on April 8th—and once again, we explored some bold bullish scenarios that, at the time, were far from obvious. Fast forward to today… and it turns out, we nailed it again. Watch it here:

https://www.youtube.com/watch?v=ORxzAytzuxk&feature=youtu.be

 

Sincerely,

Manuel Blay

Editor of thedowtheory.com