Dow Theory Update for June 19: Primary bear market for gold and silver reconfirmed

 Stocks take a nosedive.

Stocks

The SPY and Industrials, and Transports closed down. The primary trend is bullish, and the secondary one is bearish for the reasons given here.

Today’s action brought the stock indices closer to the June 5 lows. If the June 5 lows were to be violated a primary bear market would be signaled, as was explained here.

Today’s volume was higher than yesterday’s, which has a bearish connotation, since lower prices were met by expanding volume. The overall pattern of volume remains neutral.

Gold and Silver

GLD violated the 05/17/2013 primary bear market lows (red horizontal line). By violating such lows, GLD confirmed SLV's lower lows of June 7, and according to the Dow Theory, the primary bear market has been reconfirmed, once again. It is good to remember that the Dow Theory signaled a primary bear market for GLD and SLV on December 20, 2012, as was punctually reported here. Thus, this primary bear market signal is already 6 months old. If I were dealing with stocks, I would say that this primary bear market is nearing middle age, as the average duration for bear markets tends to be ca 6 months. However, I am dealing here with precious metals, which is a totally different beast, and accordingly, I have no track record to guide me as to the likely duration of this bear market. What I do know, though, and this is enough to keep me out of trouble, is that the primary and secondary trend is bearish.

Here you have an updated chart:

By violating the 05/17 lows (red horizontal line) GLD confirmed SLV and the primary bear market has been reconfirmed

  

SIL violated the 05/17/2013 primary bear market lows. However, GDX, still holds above such lows, and did not confirm. Such lack of confirmation implies that the primary bear market has not been re-confirmed yet, and, more importantly, that the secondary trend remains bullish. Perhaps the secondary bullish trend is in its death-throes, but until GDX makes a lower low and confirms SIL, the secondary trend remains bullish according to the Dow Theory for the reasons explained here.

The chart below shows the precarious situation of SIL and GDX:

GDX hasn't confirmed SIL lower lows. Will it do it soon?

 

Here you have the figures of the markets I monitor for today.

 

Data for June 19, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		11/15/2012	135.7
Bull market signaled		01/02/2013	146.06
Last close		06/19/2013	163.45
Current stop level: Sec reaction lows			161.27
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
11.91%	20.45%	None.
DOW THEORY PRIMARY TREND MONITOR GOLD (GLD)
			GLD
Bull market started		05/16/2012	149.46
Bull market signaled		08/22/2012	160.54
Exit December 20		12/20/2012	161.16
Current stop level: Sec React low		11/02/2012	162.6
Realized Loss %	Tot advance since start bull mkt
0.39%	7.83%
DOW THEORY PRIMARY TREND MONITOR SILVER (SLV)
			SLV
Bull market started		06/28/2012	25.63
Bull market signaled		08/22/2012	28.92
Exit December 20		12/20/2012	29
Current stop level: Sec React low		11/02/2012	29.95
Realized gain %	Tot advance since start bull mkt
0.28%	13.15%
DOW THEORY PRIMARY TREND MONITOR ETF SIL
			SIL
Bull market started		07/24/2012	17.08
Bull market signaled		09/04/2012	21.83
Exit January 23		01/24/2013	21.69
Current stop level: Sec React low		11/15/2012	21.87
Realized Loss %	Tot advance since start bull mkt	Max Pot Loss %
-0.64%	26.99%	27.81%
DOW THEORY PRIMARY TREND MONITOR ETF GDX
			GDX
Bull market started		05/16/2012	39.56
Bull market signaled		09/04/2012	47.77
Exit January 23		01/24/2013	44.56
Current stop level: Sec React low		12/05/2012	45.35
Realized Loss %	Tot advance since start bull mkt	Max Pot Loss %
-6.72%	12.64%	20.75%

Sincerely,

The Dow Theorist