Precious metals still very close to reconfirming primary bear market
Let’s get started with our daily commentary on this Dow Theory blog.
The Industrials, Transports and SPY closed down.
The primary trend was reconfirmed as bullish on October 17th and November 13th, for the reasons given here and here.
Today’s volume was higher than yesterday’s. This is bearish, as lower prices were met by stronger volume. I’d label volume as neutral for the reasons given here.
Gold and Silver
SLV closed down, 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.
Here, I explained that GLD and SLV set up for a primary bull market signal. However, a setup is not the same as the “real thing," namely the primary bull market; thus, many “setups” do not materialize and until the secondary reaction closing highs are jointly broken up, no primary bull market will be signaled. However, such set up will be nullified if GLD and SLV jointly violate the last recorded primary bear market lows, as I explained here.
As to the gold and silver miners ETFs, SIL closed down and GDX closed up. The primary trend is bearish, as was profusely explained here and here. Likewise, the secondary trend is bearish.
All in all, the last shoe to drop for the precious metals sector would be GLD and SLV reconfirming the ongoing primary bear market. Until this happens, the secondary trend is bullish, and this is the only “bullishness” to be found in this beleaguered sector.
Here you have the figures for the SPY which represents the only market with a suggested open long position:
|Data for December 3, 2013|
|DOW THEORY PRIMARY TREND MONITOR SPY|
|Bull market started||06/24/2013||157.06|
|Bull market signaled||07/18/2013||168.87|
|Current stop level: Secondary reaction low||165.48|
|Unrlzd gain %||Tot advance since start bull mkt||Max Pot Loss %|
The Dow Theorist