Dow Theory Update for Nov 27: Gold and Silver miners ETF have not signaled primary bear market yet

New Dow Theory saga coming soon

I hope to start writing very soon a new “saga” entitled “putting the Dow Theory under stress-test”. The posts that will follow will analyze the Dow Theory inside out in order to determine how it is likely to perform under the most challenging economic environments. Readers of this Dow Theory blog stay tuned.

US STOCKS

The primary trend is  bullish as explained here and here

The secondary trend is bearish (secondary bearish reaction against the primary bullish trend) as explained here:

On Nov 19, the Transports rallied more than 3% from the secondary reaction closing lows and hence the setup for a primary bear market was completed. In case we had any doubts, on the next trading day the SPY and the Industrials did exceed the +3% threshold. All in all, now we have to wait for either one of the following developments:

            1) Either the secondary reaction closing lows are jointly violated, in which  case a primary bear market would be signaled.

            2) Or, the last recorded closing highs are jointly broken out, in which case  the primary bull market would be reconfirmed.

So now we have to patiently wait.

GOLD AND SILVER

The primary and secondary trend is bearish as explained here.

GOLD AND SILVER MINERS ETF

The primary trend remains bullish as explained here.

SIL has violated its 9/10/2015 closing low (last primary bear market low) unconfirmed by GDX. Both ETF miners are under a strong secondary reaction (displayed by the red rectangles on the chart below).

We have to wait for GDX to confirm. Until then we cannot declare a new primary bear market.

Sincerely,

The Dow Theorist