Tuesday, February 21, 2017

Dow Theory Update for February 21: Stocks continue making higher highs




When will the winning streak end?


I apologize for not having posted that much. I have been (and still “am”) extremely short of time due to my mother’s illness.

In any instance, primary trends have not changed during my days of absence.


US STOCKS


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

On February 15, the Industrials, Transports and SPY (SP 500) jointly made higher highs. Today, the SPY and the Industrials jointly made higher highs. Ergo, both the primary and secondary trend remains bullish.

Here you have an updated chart. It is worth mentioning that since November 21st, 2016 (date of the primary bull market signal) three months have elapsed and hitherto no hint of a secondary reaction is to be seen on the charts. 

No seconary reaction in sight
 

GOLD AND SILVER

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


In my last post I wrote that SLV needed to better its last recorded closing highs of Jan 23 so that the time requirement for the secondary reaction is met. Well SLV has amply bettered such highs, and hence, given that GLD long time ago met the time requirement for a secondary reaction, we can declare that the secondary trend for SLV and GLD has changed to bullish (secondary reaction against the primary bear market).


If no pullback (at the very least exceeding 3% or more depending on volatility) developed, a primary bull market would be signaled when the closing highs of the last completed secondary reaction (highlighted with red horizontal lines) get jointly violated by both SLV and GLD. Below an updated chart. The blue rectangles display the ongoing secondary reaction. This is the “famous” alternative primary bull (and bear) market signal which Rhea explains on page 77 of his book “The Dow Theory”. More about it here

Strong seconary reaction. Hitherto no pullback hs set up SLV and GLD for the "usual" Dow Theory signal



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 amply met.

GDX has exceeded the closing highs of the last completed secondary reaction on February 6th, 2017. However, SIL has not confirmed, and hence based on Rhea’s alternative bull market signal, we cannot yet declare the primary trend as bullish.

Here you have an updated chart. The red horizontal lines display the closing highs of the last completed secondary reaction. The blue rectangles display the ongoing secondary reaction. 

 
If SIL exceeded the red horizontal line, a primary bull market would be signaled


Sincerely,
The Dow Theorist




3 comments:

  1. I hope your Mom gets better soon.

    ReplyDelete
  2. Thank you, and best wishes for the health of your mother.

    ReplyDelete