Trends unchanged for US Stocks and gold universe
The secondary trend is bearish
(secondary reaction against the primary bull market), as explained here.
All indices rallied more than
3% off their July 8th closing lows. So now either:
a) Stocks jointly violate
their secondary reaction lows, in which case a primary bear market will be
signaled.
b) Stocks jointly better their
last recorded primary bull market highs (May 19th, for the INDU, May
21st, for the SPY, and May 18th for the TRAN), in which
case the primary bull market will be reconfirmed.
On July 27th, the Industrials
violated their July 8th secondary reaction lows. However, this was
not a primary bear market signal because the SPY did not confirm. Furthermore,
as explained here, under Schannep’s Dow Theory the SPY must always be present
for a primary bear/bull market signal to be valid.
All in all, in spite of recent
declines, the lull continues.
GOLD AND SILVER
The primary and secondary trend
is bearish as explained here.
By the way, the steep decline
that followed SLV’s and GLD’s primary bear market signal, confirms that one
should not “hope” for a rebound following a primary bear market signal in
an attempt to get a better “exit” price. Experience says that ca. 2/3 of the
time, a small rally follows immediately after the primary bear market signal.
However, 1/3 of the time, such a rally fails to materialize and we get an even
steeper decline. The money won by not selling immediately is more than lost in
the 1/3 of occurrences when a collapse follows a primary bear market signal
(i.e. 1929 and 1987 crash among other instances).
Bottom line: One must react as soon as possible once a
primary bear market signal has been flashed.
GOLD AND SILVER MINER'S ETFs
As to the gold and silver
miners ETFs,on 3/10/15 SIL violated its 12/16/2014 primary
bear market closing low. On July 8, 2015 SIL violated its March 10th,
2015 closing low.
On 7/1/2015 GDX violated its
secondary reaction lows of 3/10/2015, and hence, it confirmed the bearish
action of SIL thereby signaling a primary bear market signal.
Thus the primary and secondary
trend for SIL and GDX is bearish.
By the way, my musings
concerning the need to promptly and without hesitation honor the Dow Theory
signals do fully apply to SIL and GDX. Price action after the primary bear
signal offered no respite to sellers. No rally, no mercy.
Sincerely,
The Dow Theorist
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