Dow Theory Update for June 24: Stocks closed down and trends unchanged

GLD and SLV edge modestly up and make higher minor highs

US Stocks

The SPY, Transports and Industrials closed down.

Last Friday I wrote a Dow Theory special issue where I alerted readers about surging bearish volume. Today’s action seems to confirm that a top has been made. However, it remains to be seen whether it is a minor top (which means that soon higher highs will be made) or it is “the” one. My experience with one-day  bars of huge bearish volume is that there tends to be follow through expressed in at least a couple of percentage points down. More cannot be inferred from one’s day volume. So let’s see whether a secondary reaction develops.

 

The primary trend remains bullish, as explained here, and more in-depth here. 

The primary trend was reconfirmed as bullish on October 17^th, 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.

The secondary trend is bullish too, as explained here and here.

Gold and Silver

SLV, and GLD closed up. 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 27^th, 2013. From such highs the market declined without jointly violating the June 27^th, 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. However, the secondary bullish reaction against such old primary bear market is also getting quite old. Tie. 

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 (technically: an outside reversal bar).

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 GDX 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 GDX 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