Precious metals weak and no trends changed
US Stocks
The SPY, Industrials, and
Transports closed up. The Industrials finally broke above their last recorded
primary bull market closing highs (July 16th). Even though, as per
my own Dow Theory “flavor," the primary bull market was reconfirmed on
September 3rd (as the SPY and Transports broke to new highs),
according to Schannep’s “flavor” the primary bull market had not been
confirmed, as he requires the three indices to break to new highs for the primary bull
market to be confirmed.
With today’s price action, the
primary bull market has also been confirmed under Schannep’s Dow Theory.
All in all, while we don’t
know what the future has in store for us, technically and under the Dow Theory
is in good health.
Here you have an updated chart
depicting recent price action (take a look at the blue horizontal lines which
represent the last primary bull market highs, which have been bettered by the
three indices we monitor).
Primary bull market reconfirmed under Schannep's and my own interpretation |
The primary trend was
reconfirmed as bullish on October 17th, 2013, and November 13th,
2013, March 7th, 2014, and more recently, September 2nd, 2014, for
the reasons given here, here, here and here.
So the current primary bull
market signal has survived four
secondary reactions.
The secondary trend is bullish,
as explained here.
Gold and Silver
SLV and GLD closed down. For
the reasons I explained here, and more
recently here the primary trend remains bearish. On
September 12th SLV closed at
the June 27th, 2013 primary bear market lows. Closing “at” the
lows is not a violation of such lows. On the other hand, GLD hasn’t even
managed to violate its primary bear market lows. All in all: The primary bear
market has not been reconfirmed yet.
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 you have an updated chart:
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.
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, and recent
price action seems to suggest that the primary bull market signal is not in
sight yet.
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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