Precious metals listless
US Stocks
The SPY, Industrials, and Transports
closed up. The Industrials remain below the last recorded primary bull market closing highs.
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 strongly 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 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 up. Was
today’s action a fake-out given the high relative strength of the miners versus their respective precious metals?
If so, SIL and GDX should start to rally and escape the current depressed level
soon.
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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