Dow Theory Update for October 1: Secondary (bearish) reaction for stocks signaled today

The primary trend remains bullish, though.

Very short update, as I don’t have ample time.

The Industrials have been declining for 8 trading days. The SPY and the Transports for 9 trading days.  All of them have declined for more than 10 calendar days. Hence the time requirement for a secondary reaction (under Schannep’s rules) has been met today.

As to the percentage decline requirement, it has been met by two indices, namely the Transports which have declined -5.03% from their Sept, 18 closing highs and the SPY which declined -3.7% from the Sept, 18 closing highs. Since two indices have declined more than 3%, the “extent” requirement has also been met.

All in all, now stocks are officially in a secondary reaction.The primary trend remains bullish, though.

Here you have an updated chart. The red rectangles highlight the ongoing secondary reaction.

Secondary reaction (correction) against the primary bullish trend (red rectangles)

Gold and Silver and their stocks.

No changes in trends, all of them still flirting with a reconfirmation of the primary bear market. But not there yet.

Sincerely,

The Dow Theorist.