Secondary reaction for US stocks continues
I am writing before the close. So things might change.
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:
On August 2nd, 2019 a secondary reaction
against the primary bull market was signaled, as explained here. As of this
writing US stocks indices have further declined (in the vicinity of -6%). Once we have
a rally of at least +3% on one or more indices, the setup for a primary bear
market signal will have been completed. For the time being we sit and wait.
Thus, the secondary trend is bearish.
Here you have an updated chart. The orange rectangles
display the secondary reaction.
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| Full-fledged secondary reaction against primary bull market |
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.
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.
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. From that date both GLD and SLV have made further higher highs. A
bull market.
Here you have an updated
chart:
 |
| Primary bull market continues |
GOLD AND SILVER MINERS ETFs
The primary trend is
bullish since 12/18/2018 as explained here. No changes.
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. Since that date
both ETFs have been making higher highs. A bull market.
Here you have an updated
chart:
 |
| Primary bull market |
Long term US
interest rates (20 years and 10 years)
Although I do not usually report about these two
important ETFs (TLT and IEF), and it is pity since interest rates are especially suited to
the Dow Theory. However, I lack the time to post about all the Dow Theory “events”
I see. It suffices to say that they are displaying a beautiful bull market,
even though when it started many were predicting the demise of the secular bull
market in bonds. Since the onset of the primary bull market some 8 months ago,
there has not been a single secondary reaction. This is a truly remarkable
primary bull market. I wrote more about it here.
Here you have an updated chart:
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| A super clean (and strong) primary bull market. No secondary reaction has been hitherto signaled |
Sincerely,
The Dow Theorist
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