Saturday, June 17, 2017

Dow Theory Update for June 17: The Transports go on refusing to confirm the Industrial’s and S&P 500’s higher closing highs

GLD broke up its primary bull market high unconfirmed by SLV


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

The analysis I made in my last post of June 1st, 2017 remains fully valid. After June 1st the Industrials and the S&P 500 have made marginally higher closing highs, while the Transports remain below their last recorded March 1st closing highs.

All in all: No confirmation. The longer it takes for the Transports to confirm, the more suspect the current rally becomes.

One thing is clear: The benefit of doubt is always to be given to the current trend. The primary trend is bullish, and lest we forget, the trend when appraised with weekly bars using Dow Theory rules is unambiguously bullish.

By the way, the current primary bull market signal (given on November 21st, 2016) will soon be 7 months old. While this is less than the average duration for a Dow Theory signal, at least we are getting a “longer” signal that those we had in the last two years. Is the whipsawing over? I don’t know. I just stick to well digested rules. I only know that it was very hard to me to honor the November 21st, 2016 signal, as I thought that another whipsaw was in the making. However, I was disciplined. Maybe what I wrote here and here, helped me stay disciplined. Recent "fibrillation", no matter how annoying it is, is to be regarded as an oddity.


The primary trend turned bullish on April 12th, 2017 as explained here

The secondary trend is bearish, as explained in depth here.

SLV and GLD set up for a primary bear market signal, as explained here.
On June 6th, 2017 GLD broke up its April 18th, 2017 primary bull market closing high (bottom chart, blue arrow). However, SLV did not confirm by a wide margin (which I interpret as being bearish), which implies that the primary bull market was not confirmed. Immediately thereafter, both precious metals have declined with gusto.

If SLV and GLD jointly violated their primary bear market closing lows (red horizontal lines), a primary bear market would be signaled.

Here you have an updated chart.

Lack of confirmation by SLV and a bearish trend when using weekly bars spells trouble for the current bull market

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.


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.

The Dow Theorist

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