Dow Theory Update for April 6: Trends unchanged

No secondary reaction for stocks yet

US STOCKS

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

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 27^th). 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.

No secondary reaction yet

Have we seen the top for stocks? See my thoughts on my last post 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.

As was explained here, SLV and GLD have set up for a primary bull market signal. Please mind that "setup" is not tantamount to the actual 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.

GOLD AND SILVER MINERS EFTs

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

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.

Sincerely,

The Dow Theorist