Trends remain unchanged for stocks, gold, silver and their miners.
My time remains in short supply. However, there is no
need for a daily update, as the markets do not deign to change their trends,
not even secondary ones.
US Stocks.
The dreaded (and thousand times wrongly anticipated by
many) secondary reaction stubbornly refuses to materialize, as stocks continue
flirting with higher closing highs.
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
Gold and silver (GLD and SLV)
are still far from signaling a primary bull market signal .Thus, if volatility remains normal, any new primary bull market signal
(which implies bettering the secondary reaction highs) is not in sight.
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 1 and ½ year elapsed
since the bear market signal was flashed. However, I am extremely skeptical as
to the predictive power of statistics. Each bull and bear market have their own
idiosyncrasy and hence past durations do not necessarily help us time a change
of trend. 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
and price compression.
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.
Gold and Silver
miners ETFs (GDX and SIL)
On July 11th, I alerted the followers of
this Dow Theory blog that SIL and GDX were close to signaling a primary bull
market. Go to the relevant post and chart here.
However, hitherto SIL and GDX
(while flirting intraday with a
primary bull market signal, as the secondary reaction closing highs were
momentarily exceeded, but closing below
such secondary reaction closing highs) have refused to signal a primary bull
market and have modestly retreated from recent highs. Look at the chart below and you will see that
the blue horizontal lines (the secondary reaction closing highs) remain
untouched.
 |
| Will a primary bull market be signaled? the blue horizontal lines will let us know |
The junior gold miners (GDXJ)
remain strong and the GDXJ/GDX ratio is near its most recent highs which tends
to signal underlying strength for the gold miners (which increases the odds for
a final breakout and primary bull market signal). However, we must remain
patient and disciplined.
So we still have to wait and
see….
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
No comments:
Post a Comment