Dow Theory Update for April 22nd: Secondary reaction in gold, silver and their miners ETFs

Primary and secondary trends unchanged for stocks

New ideas to put in written are piling up. I am finishing the sequel to “divergent interpretations of the Dow Theory”. I feel this is going to be one important post, as I have conducted a kind of test taking monthly highs as signals. Furthermore, such a test proves the importance of the principle of confirmation, importance which increases as we take a longer timeframe.

Furthermore, I’d like to find time to continue with the “capitulation” saga. More about capitulation here:

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html

By the way, capitulation is important. Some days ago “Zero Hedge” noted that the S&P is on course for its best year in history. Well, such a torrid run up got started precisely on 12/24/2018 when “capitulation” was signaled.

So I’d better have more time to write soon another “capitulation” post.

US STOCKS

The primary trend as per Schannep’s Dow Theory is bullish since March 1^st, 2019 when both the Industrials and the S&P 500 closed at +19% from the 12/24/2018 bear market closing lows. The secondary trend is bullish too, as explained here.

The primary trend as per the “Rhea/Classical” Dow Theory is bullish since April 1^st, 2019, as was explained here.

As of this writing primary and secondary trends remain also unchanged when we measure the trend according to the “Rhea/Classical” Dow Theory.

Here you have an updated chart. The blue arrow at the bottom chart displays the day (12/24/2018) when capitulation was signaled. The three blue arrows display the day of the primary bull market signal. 

An impressive runup punctually signaled by "capitulation"

 

GOLD AND SILVER

The primary trend is bullish since 12/24/2018 as explained here. No changes. We finally got a secondary reaction on 4/16/2019 when GLD violated its 03/07/2019 closing lows (and confirmed SLV which had done so some days ago). I plotted Fibonacci retracements so you can see that ca. 50% of the previous primary bull market swing (from the primary bear market lows to the hitherto most recent primary bull market highs) has been retraced for both SLV and GLD.

Here you have an updated chart.

Big Orange red rectangles display the ongoing secondary reaction against primary bull market.

GOLD AND SILVER MINERS ETFs

The primary trend is bullish since 12/18/2018 as explained here. No changes. 

The secondary trend is bearish (secondary reaction) since 4/18/2019 when GDX violated its previous 03/06/2019 closing lows (and confirmed SLV which had done so several days before). I plotted Fibonacci retracements so you can see that ca. 50% of the previous primary bull market swing (from the primary bear market lows to the hitherto most recent primary bull market highs) has been retraced for both SIL and GDX.

Here you have an updated chart.

Big orange rectangles display the ongoing secondary reaction against the primary bull market

Sincerely,

The Dow Theorist