Dow Theory Update for May 8: S&P 500 made higher highs unconfirmed by the Transports and Industrials

Secondary reaction in precious metals and their miners continues

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.

However, “capitulation” suggested the opening of a partial commitment to stocks on the very day of the market bottom (12/24/2018). More about that partial commitment here.

  

And more about “capitulation” in general in the following links:

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

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. 

Both under Schannep’s Dow Theory and the “classical” one, we have seen an episode of non confirmation. On April 23^rd, 2019 the S&P 500 bettered its September 20^th, 2018 primary bull market highs. Those were the highs of the previous primary bull market. However, the Industrials and Transports have refused to do so. The longer it takes for the Industrials and Transports to confirm, the more suspect the current rally becomes. 

The charts below display the current situation. The red horizontal lines display the last recorded primary bull market highs. As readers can see, just the S&P 500 (bottom chart) has hitherto managed to better such highs while the other two indices are lagging behind. 

Blue arrow on the right side of the chart (bottom) displays the S&P 500 higher high unconfirmed

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). More about the entrails of such a secondary reaction here.

 

The charts below display the current situation. The red oranges on the right side of the charts display the ongoing secondary reaction. The small blue rectangles inside the orange rectangles display a minor rally which did not reach the minimum threshold of 3% in at least one index in order to set up SLV and GLD for a primary bear market signal. Hence, since we did not get a setup the secondary reaction can continue making lower lows without signaling a primary bear market.

Secondary reaction which hitherto has not resulted in setup for primary bear 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), as was explained here.

The charts below display the current situation. The red oranges on the right side of the charts display the ongoing secondary reaction. The small blue rectangles inside the orange rectangles display a minor rally which did not reach the minimum threshold of 3% in at least one index in order to set up SLV and GLD for a primary bear market signal. Hence, since we did not get a setup the secondary reaction can continue making lower lows without signaling a primary bear market.

Secondary reaction that hitherto has not resulted in setup for primary bear market

Sincerely,

The Dow Theorist