Dow Theory Update for September 25: Setup for primary bull market signal completed for US stocks on 09/19/2019

Primary and secondary trends for precious metals unchanged

A primary bear market for US stocks was signaled on August 14^th, 2019 as explained here.

A secondary reaction against the primary bear market was signaled on August 30, as explained here.

On 09/19/2019 the Transports declined more than 3% from their secondary reaction closing highs. On that date the setup for a primary bull market was completed under Schannep’s Dow Theory (in other words, the sequence: bear market low, secondary reaction and pullback on at least one index was completed). Please mind that the final pullback against the secondary reaction that sets up stocks for the primary bull market need not be confirmed. More about the nuances about the confirmation principle that underlies the Dow Theory here.

From 09/19/2019 until 09/24/2019 the Transports further declined extending the total decline to -4.44%. The Industrials and S&P 500 have not managed to decline 3%.

Here you have a spreadsheet displaying the calculations

And below you find the charts displaying the current situation. The orange rectangle on the Transport’s chart (middle) displays the pullback on 09/19/2019 (which was extended until 09/24/2019). The blue horizontal lines display the secondary reaction highs which are the relevant levels to be broken up for a primary bull market to be signaled.

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 18^th, 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.

Gold and silver have declined for the last few days followed by a new rally. However, the time requirement has not been met yet. Since the time requirement has not been met, I have not bothered with measuring the extent requirement, as we need both to declare the existence of a secondary reaction.

GOLD AND SILVER MINERS ETFs

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

On June 17^th, 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.

GDX and SIL have declined for the last few days followed by a new rally. However, the time requirement has not been met yet. Since the time requirement has not been met, I have not bothered with measuring the extent requirement, as we need both to declare the existence of a secondary reaction.

Sincerely,

The Dow Theorist

Dow Theory Update for September 16: US Stocks close to signaling primary bull market

Trends for precious metals unchanged

First of all, I apologize for not having written since August 30. I still owe two posts: One concerning the analysis of the last primary bull market signal, and one concerning the next issue of the capitulation saga. Time has been in extremely short supply in the last few weeks. Other endeavors consume my time.

This post will merely update about the current market situation.

US STOCKS

A primary bear market for US stocks was signaled on August 14^th, 2019 as explained here.

A secondary reaction against the primary bear market was signaled on August 30, as explained here.

From that date, the Industrials, the Transports and the S&P 500 have rallied. No 3% pullback on at least one index has occurred, and hence the setup for the ordinary primary bull market signal has not been completed.

Nonetheless, if all three indices broke up above the last recorded primary bull market closing highs, a primary bull market would be signaled. For the time being, only the Transports have done so unconfirmed. This one unusual, albeit fully Dow Theory-compliant alternative primary bull market signal. As a reminder, there are three alternative ways under the Dow Theory to signal either a bull or bear market. More about such three alternative signals in this post:

http://www.dowtheoryinvestment.com/2019/04/dow-theory-update-for-april-5st-back-to.html

Here you have an updated chart:

In spite of the current rally, the primary trend remains bearish

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 18^th, 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.

Gold and silver have declined for the last few days. However, the time requirement has not been met yet. Since the time requirement has not been met, I have not bothered with measuring the extent requirement, as we need both to declare the existence of a secondary reaction.

GOLD AND SILVER MINERS ETFs

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

On June 17^th, 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.

GDX and SIL have declined for the last few days. However, the time requirement has not been met yet. Since the time requirement has not been met, I have not bothered with measuring the extent requirement, as we need both to declare the existence of a secondary reaction.

Sincerely,

The Dow Theorist