Thursday, March 17, 2016

Dow Theory Update for March 17: Trends unchanged

No setup for primary bull market in stocks yet


The primary trend is bearish, as explained here:

Here is an additional post concerning the likely decline to follow primary bear markets signals:

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

No setup for a primary bull market signal has materialized yet. Hitherto, no index has declined for more than two days and more than 3% from the last recorded secondary reaction highs. We patiently wait and see.


The primary trend is bearish as explained here.

The secondary trend turned bullish on January 26, as explained here

On February 16th, GLD after having declined for two days, and going from a closing high of 119.06 to a closing low of 114.77, set up both precious metals for a primary bull market signal. GLD declined -3.6%, which in volatility adjusted terms, given the current volatility levels of the SPY and GLD, is a movement of sufficient magnitude. More about the rationale of volatility adjustments and how I perform them, here.

SLV did not even manage to decline for two days. However, to set up markets for a primary bull/bear market it suffices to have just one index. The principle of confirmation does not apply on this specific instance, as was explained in depth, here.

So now we have SLV and GLD set up for a primary bull market signal. If the GLD’S 2/11/2016 closing highs and SLV’s 2/12/2016 closing highs were jointly broken out, a primary bull market would be signaled.

On March 3, 2016, GLD managed to break above the secondary reaction closing highs (2/11/2016). However, SLV has not confirmed and, hence, no primary bull market has been signaled.


The primary and secondary trend is bullish as explained here:

The Dow Theorist

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