Wednesday, December 24, 2014

Dow Theory Update for December 24: Primary and secondary trends unchanged

Merry Christmas!

US stocks

The Industrials, Transports and SPY closed up. The Industrials are well above the last recorded primary bull market highs, whereas the SPY and Transports have not confirmed and remain below such highs.

The primary trend remains bullish, as explained here.

The secondary trend is bearish, as there is an ongoing secondary reaction, as explained here.

Gold and Silver

SLV and GLD closed up. The primary bear market was reconfirmed on October 3rd 2014, as GLD finally broke below the June 27th, 2013 primary bear market closing lows (something which SLV had already done on Sept 17, 2014). As lower lows have been confirmed, the primary bear market has been reconfirmed. 

For the reasons I explained here, and more recently here the primary trend remains bearish.

The secondary trend is bullish (secondary bullish reaction against the primary bear market), as explained recently here. Furthermore, SLV and GLD completed the setup for a primary bull market, as explained here.

In spite of the secondary bullish reaction, the primary trend remains bearish too.

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 bearish.

On a statistical basis the primary bear market for GLD and SLV is old. Two years have elapsed since the bear market signal was flashed. 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. When will this vicious bear market end? I don’t know, and I don’t need to know. I only know that the Dow Theory will see to my being informed punctually when a new primary bull market is born.

Gold and Silver miners ETFs (GDX and SIL)

As to the gold and silver miners ETFs, SIL and GDX closed up. The primary bear market was re-confirmed on October 27th, 2014 as explained here. The primary trend for SIL and GDX is clearly bearish, as was profusely explained here and here.

The secondary trend is bearish too, and no secondary reaction has been signaled yet.

Merry Christmas to you all,
The Dow Theorist

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