Dow Theory Update for December 19: Gold and Silver close to signaling primary bear market signal

Stocks take a breather

The assessment I made yesterday, some 80 minutes before the close, remains valid. SLV closed down but refused to violate its primary bear market low (June 27^th). GLD closed down and decidedly violated its primary bear market low (June 27^th). However, as followers of this blog know, under the Dow Theory, a movement unconfirmed by the other index is at best misleading. Thus, the primary bear market has not been re-confirmed yet and until this happens, the secondary trend is to be labeled as bullish (secondary reaction against the primary bear market).

SIL and GDX, the gold and silver miners ETFs, closed down and both made lower lows, which is, of course a bearish omen. The primary trend is bearish, as was profusely explained here and here. Likewise, the secondary trend is bearish.

As to stocks, the Industrials closed up and made a higher closing high unconfirmed by the other indices. The Transports and the SPY closed down. Let’s monitor in the coming days whether the Industrial’s higher highs get confirmed (good sign) or not.

Here you have the figures for the SPY which represents the only market with a suggested open long position:

 

Data for December 19, 2013
DOW THEORY PRIMARY TREND MONITOR SPY
			SPY
Bull market started		06/24/2013	157.06
Bull market signaled		07/18/2013	168.87
Last close		12/19/2013	181.49
Current stop level: Secondary reaction low			165.48
Unrlzd gain %	Tot advance since start bull mkt	Max Pot Loss %
7.47%	15.55%	2.05%

Sincerely,

The Dow Theorist