“coiling” continues
Let’s see what the Dow Theory has in store for us today. Not much.
US Stocks
The SPY, Industrials and
Transports closed up. The higher highs made by the Transports remain
unconfirmed for the time being. Remember that some days ago I noted that
I saw not only lack of confirmation but also divergence (which tends to be a
red flag). Thus, and unless stocks make higher highs soon, a secondary reaction
might be in the making.
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, and GLD closed down. For
the reasons I explained here, and more recently here 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.
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.
I profusely explained that SIL
and GDX set up for a primary bull market signal. You can find all the relevant
information from a Dow Theory standpoint here.
Please mind that a setup is
not the real thing. So the primary trend has not turned bullish yet (or maybe “never”).
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.
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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