Dow Theory Update for January 26: US stocks “in the clear” by making new confirmed higher highs

Hence, the “clock” for appraising a secondary reaction is set to zero.

I don’t have much time to write, since my mother is in hospital and I am taking care of her.

US STOCKS

The primary and secondary trend is bullish since November 21^st, 2016, as explained here and here.

I see on the charts that yesterday (Jan 25) the SPY (and the SP 500) and the Industrials made higher closing highs. Today the Transports did the same. In other words, the previous closing highs of Dec 13 (for the SPY), Dec 20 (for the Industrials) and December 8 (for the Transports) have been jointly broken out.

Hence, since the primary bull market signal of November 21^st, 2016 no secondary reaction has developed. Higher confirmed highs means that any secondary reaction is to be counted from the last recorded highs.

All in all, the primary and secondary trend was, is, remains and has been reconfirmed bullish.  

GOLD AND SILVER

The primary and secondary trend is bearish, as was explained here and here. The primary bear market was signaled on September 30rd, 2016.

In my last post I was hesitant as to declaring the existence of a secondary reaction (I needed one more day of rally for SLV, something which has not occurred). Thus, SLV needs to better its   last recorded closing highs of Jan 23 so that the time requirement for the secondary reaction is met.

GOLD AND SILVER MINERS EFTs

The primary trend is bearish, as was explained here and here.

The secondary trend is bullish as explained here

The current decline could be setting up SIL and GDX for a primary bull market signal. I write “could” since I don’t have the time to measure percentagewise the current pullback. The time requirement for the pullback which sets up stocks for the primary bull market signal has been met (2 days for GDX and 3 days for SIL).

Sincerely,

The Dow Theorist

Dow Theory Update for January 17: Silver and Gold miners ETFs under secondary (bullish) reaction

Trends for stocks unchanged

US STOCKS

The primary and secondary trend is bullish since November 21^st, 2016, as explained here and here.

The Industrials made on December 20^th, 2016 a higher closing high unconfirmed by the Transports and SPY. Furthermore, since that date, the Industrials have been unable to make higher highs.

No secondary (bearish) reaction against the current primary bull market is in sight on the charts in spite of today's declines.

GOLD AND SILVER

The primary and secondary?? trend is bearish, as was explained here and here. The primary bear market was signaled on September 30rd, 2016. Depending on the way one appraises secondary reactions (time requirement) one could even say that the secondary trend has turned bullish (more below).

After what can be considered a secondary (bullish) reaction against the primary bear market (the rally retraced more than 1/3 of the previous decline on a confirmed basis), newer lows (breaking down below the last recorded primary bear market closing lows)  re-confirmed the primary bear market on November 14^th, 2016.

If the current rally persists for just one more day for SLV (which is tantamount to 15 trading days), gold and silver will change their secondary trend to bullish (secondary reaction against the primary bear market). If we apply the classical Dow Theory, GLD and SLV have retraced CA. 50% of the current primary bear market swing (measured from the highs of the last completed secondary reaction, which is displayed by blue rectangles on the left side). However, the time requirement (let's say three weeks) has not been met by SLV.

I consider three weeks of rallying  (December 23^rd for SLV and December 15^th for GLD) coupled with an advance off the lows which has retraced 50% of the current primary bear market swing (which is to be counted from the closing highs of the last recorded secondary reaction, that is November 2^nd for SLV and November 4^th for GLD) enough time and enough retracement under the Rhea/classical Dow Theory for a secondary reaction to exist. Just one more day of rallying for SLV would make me even more sure about the existence of the secondary reaction.

Given the generous price advance off the primary bear market closing lows, I feel it is not necessary to perform volatility adjustments in order to confirm the existence of a secondary reaction. SLV has advanced +9.18% and GDX has advanced +7.92%. Both price advances more than double the 3% minimum threshold for stock indices.

Here you have an updated chart. 

Secondary reaction in sight? Or are we already under a secondary reaction?

GOLD AND SILVER MINERS ETFs

The primary trend is bearish, as was explained here and here.

After what can be considered a secondary (bullish) reaction against the primary bear market (the rally retraced almost 1/3 of the previous decline on a confirmed basis), newer lows (breaking down below the last recorded primary bear market closing lows)  re-confirmed the primary bear market on November 13^th, 2016

Today, we can declare SIL and GDX under a secondary (bullish) reaction against the primary bear market.

SIL has rallied for 15 trading days (closing lows made on December 22^nd). GDX has rallied for 20 days (closing lows made on December 15^th). SIL has rallied +21.85% and GDX has rallied + 23.01%.

Furthermore, both SIL and GDX have retraced ca. 60% of the current primary bear market swing.

While given the generous amount of time and retracement involved it is not necessary to perform volatility adjustments (more about them here and here) in order to declare the existence of the secondary reaction. However, just for the sake of curiosity I did the calculations and found that both SIL and GDX have exceeded the minimum volatility adjusted movement (which stands at 21.37% for SIL and 16.7% for GDX, based on a 30 trading days volatility reading versus the SPY)

All in all, the secondary trend has changed from bearish to bullish for SIL and GDX. Please mind that the primary trend has not changed and remains bearish.

For a primary bull market to be signaled either the closing highs of the last completed secondary reaction are jointly violated (November 9^th for SIL and November 3^rd for GDX) or there is a confirmed pullback followed by a rally that breaks up the current secondary reaction closing highs. So we will watch together these market and see what happens.

Here you have an updated chart

A clear text-book like secondary reaction against the primary bear market

Sincerely,

The Dow Theorist

Dow Theory Update for January 10: Trends remain unchanged

However, precious metals could change their secondary trends soon if current rally persists

I am writing before the close, so things might change (especially for stocks) after the close.

US STOCKS

The primary and secondary trend is bullish since November 21^st, 2016, as explained here and here.

The Industrials made on December 20^th, 2016 a higher closing high unconfirmed by the Transports and SPY. Furthermore, since that date, the Industrials have been unable to make higher highs.

No secondary (bearish) reaction against the current primary bull market is in sight on the charts. Here you have an updated chart where you can see that stocks have been meandering. They have failed to make higher highs but at the same time no decline has qualified as a secondary reaction. 

No secondary reaction in sight unless stocks suddenly crash below the last recorded lows

GOLD AND SILVER

The primary and secondary trend is bearish, as was explained here and here. The primary bear market was signaled on September 30rd, 2016

After what can be considered a secondary (bullish) reaction against the primary bear market (the rally retraced more than 1/3 of the previous decline on a confirmed basis), newer lows (breaking down below the last recorded primary bear market closing lows) has re-confirmed the primary bear market on November 14^th, 2016.

If the current rally persists for some more days, gold and silver will change their secondary trend to bullish (secondary reaction against the primary bear market). If we apply the classical Dow Theory, GLD and SLV have retraced more than 1/3 of the current primary bear market swing (measured from the highs of the last completed secondary reaction, which is displayed by blue rectangles). However, the time requirement (let's say three weeks) has not been met by SLV. Here you have an updated chart showing the current rally and the price retracements hitherto achieved.

SLV and GDX are very close to signaling a secondary reaction. Just a little bit more time is needed

GOLD AND SILVER MINERS ETFs

The primary and secondary trend is bearish, as was explained here and here.

After what can be considered a secondary (bullish) reaction against the primary bear market (the rally retraced almost 1/3 of the previous decline on a confirmed basis), newer lows (breaking down below the last recorded primary bear market closing lows) has re-confirmed the primary bear market on November 13^th, 2016

If the current rally persists for some more days and the last recorded highs of January 5th are jointly bettered, SIL and GDX will change their secondary trend to bullish (secondary reaction against the primary bear market). As you can see on the chart bellow, both ETFs have retraced ca. 50% of the current primary bear market swing. 

A little bit more time rallying and higher highs would signal a secondary reaction

Sincerely,

The Dow Theorist