Primary and secondary trend for gold, silver and their ETFs miners bullish
This post has been amended on
08/06/2019. I thank Jack Schannep for spotting two mistakes I inadvertently
made when determining the onset of the secondary reaction. First, The
Industrials had been declining since 07/15 and not 07/23/2019, as I wrote. Secondly, I
twisted the formula for calculating declines on my spreadsheet so the
percentages shown were close to accurate but not totally correct. However, the
secondary reaction was correctly signaled (exactly at the right moment). The date of its signalling does not
change. What follows is the amended version.
US STOCKS
The primary trend as per Schannep’s Dow Theory is bullish since March 1st,
2019 when both the Industrials and the S&P 500 closed at +19% from the
12/24/2018 bear market closing lows.
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:
The secondary trend turned bullish (official end of secondary reaction)
on 06/20/2019, when both the Industrials and the S&P 500 broke up their
respective primary bull market closing highs, and, hence, the secondary
reaction which was signaled on May 9, 2019 as explained here. and here was ended.
The current decline does qualify as a new secondary reaction under
Schannep’s rules. As a reminder, the rules for a secondary reaction are:
a) A decline that interrupts
the primary bull market.
b) That lasts a minimum of
10 calendar days on at least 2 of the 3 indices.
c) With at least 8 trading
days as the average of all three indices.
The Transports made their
last recorded closing high on 07/15/2019. The Industrials did so on 07/23/2019.
The S&P 500 did so on 07/26/2019. Hence both the Industrials and the
Transports have been amply declining by more than 10 calendar days. The S&P
500 have declined for 5 trading days. The average time of decline of the three indices amounts to 8.66 trading days,
which is more than 8 trading days.
As to the extent requirement all the indices have
declined more than 3%, which implies that this requirement has also been met.
Here you have a spreadsheet
Hence, we can declare
that with date of today (August 2nd, 2019) a secondary (bearish) reaction
against the primary bull market has been signalled.
Here you have an updated
chart.
 |
| Secondary reaction for US indices signaled today |
As per the Rhea/classical
Dow Theory, the secondary reaction has not changed. Since the Classical Dow Theory
uses only two indices (Industrials and Transports) and the Transports, and the
Transports have not bettered their primary bull market closing highs, the
secondary reaction which started on April 2019 remains in force, and, hence,
the setup for a primary bear market has not changed.
Here you have an updated
chart as per the “Rhea/Classical” Dow Theory.
 |
| Nothing has changed as per the Classical Dow Theory. The "old" secondary reaction continues in force |
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 and here.
Furthermore, currently SLV
and GLD setup for a primary bear market signal as was explained here.
On June
18th, 2019 GLD managed to break up above the closing highs of the
primary bull market unconfirmed by
SLV. Hence, at that time we could not declare the end of the secondary
reaction. However, on 07/18/2019 SLV broke up above its hitherto primary bull
market highs, and hence the primary bull market has been reconfirmed.
Here you have an updated chart. The blue horizontal
lines display the last primary bull market highs.
 |
| Primary bull market reconfirmed on July 18th, 2019. End of secondary reaction. |
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. and here
Furthermore, currently SIL
and GDX setup for a primary bear market signal as was explained here.
On June 17th,
2019 GDX managed to break up above the closing highs of the primary bull market
unconfirmed by SIL. Hence, we could
not declare the end of the secondary reaction. However, on 07/17/2019 SIL broke
up above its hitherto recorded primary bull market highs, and the primary bull
market was reconfirmed.
Here you have an updated
chart. The blue horizontal lines display the last primary bull market highs.
 |
| On 07/17/2019 SIL confirmed GDX and the primary bull market was reconfirmed. End of secondary reaction signaled |
Sincerely,
The Dow Theorist
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