Primary and Secondary Trends unchanged
I haven’t postED for a while. Christmas and time in
short supply account for it. However, nothing has changed since my last post.
All trends, primary and secondary remain well entrenched.
US Stocks continue
making higher closing highs, which implies that no secondary reaction is in
sight.
The
only issue now is to have the courage to ride the bull with stocks. One might
feel tempted to sell down a bit, as one gets a dizzy feeling, and the more overstretched the market is, the higher the likelihood of a reversal. However, in real time, nobody knows when this
primary bull market will end. What if there is a final thrust of an additional 20% and we get a "normal" bear market signal at only -8% from the top? Maybe the top has been made as of this writing (technically, it seems not)
or maybe we have some extra months of fireworks to go. In real time nobody
knows. What we know, though, is that in the long run (that is irrespective of
the outcome of any given trade) we are better served by sticking to the Dow
Theory, which implies not selling until we get an indication that the primary
trend (not to be confused with a reaction) has changed. For the time being, no
such an indication can be discerned on the charts.
Here you have an updated
chart:
 |
| The charts display more than six months of market action. Not even a secondary reaction |
GOLD AND SILVER
The pullback that got started
on September 8th, 2017 has unambiguously setup SLV and GLD for a
primary bull market. A quite different issue is whether the signal will be ever
given. An in-depth explanation here. Please mind that a “setup” is not the actual signal. SLV made lower lows
(of no technical significance under the Dow Theory, though, since it was not
confirmed by GLD). For the time being, the primary bear market lows have not
been jointly revisited and hence the primary bear market has not been
reconfirmed. The longer the non-confirmation persists, the more likely that the
primary bear market could be nearing its end. However, we wait until we get a
real signal.
Here you have an updated chart.
The blue horizontal lines display the closing highs of the secondary reaction
which are the relevant levels to be broken up for a primary bull market signal
to be given.
 |
| The last rally doesn't suffice to change neither the primary nor the secondary trend |
GOLD AND SILVER MINERS EFTs
The secondary trend is bullish
as explained here
For the same reasons given
when analyzing SLV and GLD, no primary bull market has been signaled for SIL
and GDX, as explained here. GDX did not better its secondary reaction closing highs by a hair, but it
failed to do so. Furthermore, SIL was very far from its secondary reaction
closing highs.
On 11/10/2017 SIL violated its
primary bear market closing lows (red arrow on the right side of the chart).
GDX has not confirmed. Lack of confirmation implies that the primary bear
market has not been reconfirmed, and, as with GLD and SLV, the longer it takes for GDX to confirm the higher
the likelihood that the primary bear market may be nearing its end.
Therefore, the current
situation remains unchanged. We have a primary bear market signaled on
10/04/2016 (more than one year old, another candle to light). There is an
ongoing secondary reaction against the primary bear market and a setup for a
primary bull market.
Here you have an updated chart
that displays all price action since the September 2016 (thus you can see the
primary bear market signal of October 2016, the secondary reaction and the
pullback –orange rectangles- that setup the miners for a primary bull market).
 |
| Too soon too declare a new bull market. The bear persists, albeit might be showing signs of fatigue |
Sincerely,
The Dow Theorist
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