Precious metals exhibit weakness (this is why they are in a primary bear market).
US Stocks
The SPY continues making higher highs, which until now
have not been confirmed by the Industrials (in spite of closing up) and the Transports,
which closed down. What I wrote yesterday remains fully valid.
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. Will it survive the fourth one? Confirmed higher highs will let us know.
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. 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.
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. On July 22nd, I explained that the signal
did not materialize yet, as you can read here. Today’s
action distances even more SIL and GDX from the relevant levels to be broken up
for a primary bull market to be signaled, as you can see on the chart
below.
 |
| SIL and GDX remain unable to better the secondary reaction closing highs (blue horizontal lines) |
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.
Sincerely,
The Dow Theorist
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