Trends for precious metals ETFs and US stocks unchanged
US STOCKS
On March 1, 2017, the Industrials,
Transports and SPY made jointly higher highs. Since then the Industrials,
Transports and SPY have declined. The decline for the Transports has hitherto
lasted 14 days. The decline for the SPY and Industrials has lasted 18 days
(last closing lows made on March 27th). The Industrials and
Transports have declined -2.67% and -6.91% respectively. The SPY has declined
-2.56% (The S&P 500 – 2-27%).
Under Schannep’s Dow Theory,
at least two indices should decline more than 3% in order to declare the
existence of a secondary reaction (extent
requirement). Hence, given that only the Transports have declined more than
3%, the extent requirement has not been
met.
As far as time is concerned,
under Schannep’s Dow Theory, a secondary reaction must last a minimum of 10
calendar days on 2 of the 3 indices with at least 8 trading days as the average
of all three indices. The Transports have
declined for 14 trading days, whereas the Industrials and SPY have declined for
18 trading days. Hence, the time
requirement has been amply met.
Here you have an updated
chart.
In spite of mild declines, no secondary reaction yet |
Have we seen the top for
stocks? See my thoughts on this topic here
GOLD AND SILVER
The primary trend turned
bullish today. GLD broke up its secondary reaction closing highs (February 24th)
on April 11th. SLV confirmed today April 12th by breaking
up its secondary reaction closing highs of March 1st.
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. Furthermore, the gold
and silver miners ETFs remain in a primary bear market, unless a bullish
confirmation comes soon, I see even more headwind.
Here you have an updated
chart. The blue horizontal lines display the closing highs of the secondary
reaction (blue rectangles on the right side of the charts) which had to be broken up.
GOLD AND SILVER MINERS EFTs
The secondary trend is bullish
as explained here
As was explained here, SIL and GDX have set
up for a primary bull market signal.
If the last recorded primary
bear market lows were jointly revisited, the primary bear market would be
reconfirmed.
In the last few days we have seen a confirmed rally. Nonetheless, such rally hasn’t changed the technical picture.
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.
Here you have an updated
chart:
For the time being just a secondary reaction (blue rectangles right side of the charts) within a primary bear market |
Sincerely,
The Dow Theorist
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