Transports break above the December 31st, 2013 closing highs.
I am short of time, so it is going to be a brief post
on this Dow Theory blog.
The SPY, the Transports and the Industrials closed up.
The SPY made higher closing highs (well exceeding their December 31st, 2013 closing highs) confirmed by the Transports, which
finally managed to exceed their January 23rd, 2013 closing highs.
The Industrials haven’t confirmed yet. However, two indices suffice to
reconfirm the primary bull market.
Therefore, the primary trend is bullish and has been
reconfirmed.
The secondary trend has been signaled as bullish
today.
Gold and Silver
SLV and GLD closed down. 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 down. 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.
Sincerely,
The Dow Theorist
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