And trends remain unchanged
Today’s is another day when sharp movements in stocks
and gold (and GDX) mean nothing from a long (and even medium) term perspective.
Accordingly, trends (even secondary ones) remain unchanged.
US
Stocks
The
SPY, Industrials and Transports closed down.
The primary trend was
reconfirmed as bullish on October 17th, 2013, and November 13th,
2013 and March 7th, 2014, for the reasons given here, here and here.
So the current primary bull market signal has
survived three secondary reactions.
Gold and Silver
SLV closed down, and GLD
closed up. For the reasons I explained here, and more recently here, and in spite of all the bullishness
than now surrounds gold and silver, the primary trend remains bearish.
For the primary trend to turn
bullish, SLV and GLD should jointly
break above the secondary (bullish) reaction highs. As a reminder, the
secondary reaction closing highs were made on August 27th, 2013. From
such highs the market declined without jointly violating the June 27th,
2013 primary bear market lows.
By the way, I alerted that the
secondary trend turned bullish long ago (on July 22, 2013), when most market
pundits were solidly bearish, as you can read here. Now, those very pundits are very bullish as only the sky was the limit. I
take the middle road based on the Dow Theory: Since July 22, 2013 there was
technically good reason not to be so bearish; on February 14th, 2014, there is
no reason to be long term so bullish.
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.
On a statistical basis the
primary bear market for GLD and SLV is getting old. More than one year since
the bear market signal was flashed has elapsed. However, I am extremely
skeptical as to the predictive power of statistics. I prefer price action to
guide me, and the Dow Theory tells me that the primary trend remains bearish
until reversed.
Furthermore, the June 27, 2013
lows remain untouched. The longer this situation lasts, the higher the odds
that something might be changing. But I wait for the
verdict of price action.
As to the gold and silver miners ETFs, SIL and GDX closed up. The
secondary trend is bullish, as explained here. In spite of short term
bullish accomplishments, SIL and GLD are not in a primary bull market.
The primary trend for SIL
and GDX remains, nonetheless, bearish, as was profusely explained here and here.
Here you have the figures for
the SPY which represents the only market with a suggested open long position:
Data for March 13, 2014 | |||
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 | 03/13/2014 | 185.18 | |
Current stop level: Secondary reaction low | 174.17 | ||
Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
9.66% | 17.90% | None |
Sincerely,
The Dow Theorist
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