Friday, November 27, 2015

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

Friday, November 20, 2015

Dow Theory Update for November 20: US Stocks set up for primary bear market.

Gold and Silver miners ETFs still flirting with primary bear market signal




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:


Yesterday (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, today the SPY and the Industrials did exceed the +3% threshold. The +3% rallies are displayed with a blue rectangel (see chart below). 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.

The horizontal red lines on the right side of the chart displays the critical level to be violated for a primary bear market to be declared. Below updated charts:

We are approaching a moment of truth: Either primary bull market reconfirmed or primary bear market
 

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

Wednesday, November 18, 2015

Dow Theory Update for November 18: Precious metals miners ETFs averted primary bear market signal for another day





US Stocks have not rallied three percent yet.


Very brief update.

US STOCKS


The primary and secondary trends are bullish as explained here and here

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


I wrote yesterday that at least one index had to rally by at least 3% in order to set up stocks for a primary bear market signal. Well, the SPY rallied more than this amount (by a hair) but the S&P 500 index has merely risen 2.99% off the 11/13/2015 closing lows. The Industrials and Transports are well below the 3% threshold.

Thus, we cannot say that the lows of the secondary reaction have been finally made, and accordingly no setup for a primary bear market signal has occurred yet.

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. Today GDX (as well as SIL) rallied. Hence, no confirmation has occurred yet.

Sincerely,

The Dow Theorist

Tuesday, November 17, 2015

Dow Theory Update for Nov 17: Primary bear market (or reconfirmation) for gold and silver signaled today





US Stocks under bearish secondary reaction


My apologies for this post. It has been written in a hurry, and I would have liked to have more time to write a more structured one. However, there are changes in trends, and I feel it is important to provide information to the followers of this Dow Theory blog.

US STOCKS


The primary and secondary trends are bullish as explained here and here


By the way, this primary bull market signal was not greeted with enthusiasm by many. It is said that bull markets climb a wall of worries, and this last signal was met with disdain. This is what prompted me to write this post in order to set the record straight about the odds and the necessity of honor all signals.

 Since last Friday, November 13th stocks are under a secondary (bearish) reaction against the primary bullish trend.

According to Schannep’s Dow Theory flavor for a secondary reaction to be declared it is necessary that the average declining time for the SP 500, Industrials and Transports be at least 8 trading days. Furthermore, in order to avoid that just one very weak declining index tilts the average of declining days, it is necessary that at least two indices have been declining by 10 calendar days (each). Such time requirements were met last Friday, November 13th.

The extent requirement (namely, at least two indices should have declined by more than three percent since the last primary bull market recorded closing highs) was met last Friday too, as all three indices had declined by slightly more than 3%.

The last two trading days (Monday and Tuesday) have witnessed a rally. However, no index has rallied by more than 3%, and consequently no setup for a primary bear market has been completed. In other words, if last Friday closing lows were jointly violated, we merely would declare that the secondary reaction is making lower lows.

So now we have to wait until (if) one index is able to rally by more than three percent.

Here you have un updated chart. The red rectangles display the ongoing secondary reaction.

Stocks under secondary reaction. Primary trend remains bullish


GOLD AND SILVER

I wrote that the primary bull market signal was highly debatable here.


And the primary market signal was debatable because the secondary reaction whose closing highs were broken out was also highly suspect, as I explained here:

Well, my qualms were for good reason. Today, SLV closed below the last recorded primary bear market closing low, and by doing this, it confirmed GLD which violated its last recorded primary bear market low on 11/11/2015.

Thus, lower confirmed lows unambiguously signal a primary bear market. 

Here you have an updated chart:

 
How low will precious metals go?

Since I wrote that the “bull market” was suspect, as the last recorded highs rather than a primary bull market signal could be read as meaning a mere secondary reaction against the prevailing primary bear market, today’s action, dispels all doubts: If it was a mere secondary reaction instead a primary bull market, lower lows, “reset” all interpretations. We are now below the last recorded primary bear market lows, and, this is bearish. Choose your pick: The primary bear market has been reconfirmed (in case we decided to negate the previous primary bull market signal and see the last recorded highs as the top of a secondary reaction) or a new primary bear market has been signaled.

GOLD AND SILVER MINERS ETF

The primary trend remains is 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.

By the way, the comments I made concerning the debatable secondary reaction (which paved the way for the primary bull market signal) with gold and silver are also applicable to SIL and GDX.

Here you have an updated chart:

Not a very bullish picture...


Sincerely,

The Dow Theorist