Primary and secondary trends unchanged
Time remains in short supply, as the health of my mother shows little progress.
Nonetheless, I hereby give you an update.
Time remains in short supply, as the health of my mother shows little progress. Nonetheless, I hereby give you an update.
US STOCKS
On March 1, 2017, the Industrials, Transports and SPY
made jointly higher highs. From this point there’s been a mild decline. The
Transports have declined more than 3%.
The SPY and Industrials have declined much less than 3%. Hence the extent requirement for a secondary
reaction has not been met (at least two indices should confirm). As to the time requirement, we are very far from
its being met, as the decline has been going on for just 5 trading days. All in
all, it is too soon to declare the existence of a secondary reaction.
Here you have an updated chart:
 |
| Since the bull market was signaled (blue arrow left side) no secondary reaction has developped yet. Blue ellipses display current pullback which does not qualify as a secondary reaction yet |
In my last post, I cogitated a little bit about the
likely losses (or even modest gains) in case the current bull swings would have
run its course. You can read such thoughts here
GOLD AND SILVER
The primary trend is bearish,
as was explained here and here. The primary bear market was signaled on September
30rd, 2016.
The secondary trend is bullish
(secondary bullish reaction against the primary bear market), as explained here.
For the last few days SLV and GLD have declined, and
hence have set up SLV and GLD for primary
bull market signal. Should the secondary reaction closing highs be jointly
bettered, a primary bull market would be signaled. The blue horizontal lines
on the charts below display the relevant levels to be broken up for a primary
bull market signal to be signaled. In the meantime, we observe the markets.
 |
| The blue rectangle (right) displays the secondary reaction. The red rectangle displays the pullbck that sets up silver and gold for a primary bull market |
So now there are two possible outcomes:
a) Either, the last recorded primary bear market lows
are jointly violated, in which case the primary bear market will be reconfirmed
(red horizontal lines)
b) Or the closing highs (blue horizontal lines) are
jointly broken up, in which case a primary bull market will be signaled.
In the meantime,
we observe the markets and wait for the verdict.
As an aside, it is worth mentioning that the primary
trend when using weekly bars is bearish, which tends to be headwind for any
meaningful bullish action.
GOLD AND SILVER MINERS EFTs
The secondary trend is bullish
as explained here
As with precious metals, for the last few days SIL and
GDX have declined, and hence have set up SIL and GDX for a primary bull market
signal. Should the secondary reaction closing highs be jointly bettered, a primary
bull market would be signaled. The blue horizontal lines on the charts below
display the relevant levels to be broken up for a primary bull market signal to
be signaled. In the meantime, we observe the markets.
 |
| The blue rectangle on the right displays the secondary reaction. The red rectangle displays the ongoing pullback which sets up both ETFs for primary bull market |
So now there are two possible outcomes:
a) Either, the last recorded primary bear market lows
are jointly violated, in which case the primary bear market will be reconfirmed
(red horizontal lines)
b) Or the closing highs (blue horizontal lines) are
jointly broken up, in which case a primary bull market will be signaled.
In the meantime,
we observe the markets and wait for the verdict.
As an aside, it is worth mentioning that the primary
trend when using weekly bars is bearish, which tends to be headwind for any
meaningful bullish action.
Sincerely,
The Dow Theorist
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