However, I still don’t fully like the secondary
reaction that defined the pivot point to be broken out for a primary bull
market to be signaled
US STOCKS
The primary and secondary trend is bullish as
explained here and here.
GOLD AND SILVER
On October 12, 2015 GLD finally deigned to confirm SLV,
and hence a primary bull market was signaled. Both SLV and GLD have bettered
their secondary reaction highs, and hence the primary trend has changed from
bearish to bullish.
However, I feel leery with this signal, and for good
reason. When I analyzed the secondary reaction whose closing highs were to be
bettered for a primary bull market to be signaled, I made clear that it was a “weak”
or “dubious” secondary reaction, since the time requirement was barely met. More
about my qualms concerning the secondary reaction here.
And here you have an updated chart:
 |
| Primary bull market signaled or just we have just had our real secondary reaction? |
On a closer look, I have seen that SLV did not even
manage to rally for at least 10 calendar days. According to Schannep, at least
two indices should rally for 10 calendar days, irrespective of the average time
of trading days. While all this is not carved in stone, and Rhean himself
stressed the difficulty in defining secondary reactions, I feel that maybe the
latest closing highs we have seen may not be indicative of a primary bull
market, but rather constitute the real secondary reaction highs. Those willing
to jump the gun, may consider the primary trend as bullish (especially given
that the ETFs miners, which tend to lead, are already on a primary bull market
of their own). Nonetheless, those more conservative may rightfully consider
that the last recorded highs determine the real
secondary reaction, and from this point we should wait for a pullback of at
least 3% (in volatility-adjusted terms) on either SLV or GLD. After such a
pullback the joint violation of the October 12 closing highs would entail a
primary bull market.
So here, there is room for two alternative
interpretations, both of them legitimate: Either the last recorded closing
highs signal a primary bull market; or, if we consider that the last rally did
not qualify as a secondary reaction, the last recorded highs constitute the
real secondary reaction from which we have to wait for the development of the
primary bull market setup.
GOLD AND SILVER
MINERS ETFs
The primary and secondary trend is bullish since
October 5th, 2015, as explained here.
Sincerely,
The Dow Theorist
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