Trends for precious metals ETFs and US stocks unchanged
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|
The Dow Theorist