The trend for US bonds remains bearish
I am posting before the close, so things might change. Please do your homework.
GOLD AND SILVER
In this post, I provided a thorough explanation concerning the rationale behind my use of two alternative definitions to appraise secondary reactions.
A) Market situation if one appraises secondary reactions not bound by the three weeks dogma.
The primary trend was signaled as bullish on 11/11/21, as I explained here.
The secondary trend is also bullish, as I explained here:
B) Market situation if one sticks to the traditional interpretation demanding at least three weeks of movement to declare a secondary reaction.
The primary trend was signaled as bullish on 3/1/22, as was explained here.
Off the 3/8/22 closing highs, SLV declined until 4/5/22, and GLD fell until 3/15/22 (only five trading days). No three weeks of declining prices have been confirmed, so we cannot talk of a secondary reaction against the primary bull market. Accordingly, the secondary trend remains bullish too.
The charts below show the latest developments. The grey rectangles on the right side of the charts show the most recent pullback that did not qualify as a secondary reaction against the primary bull market.
GOLD AND SILVER MINERS ETFs
A) Market situation if one appraises secondary reactions not bound by the three weeks dogma.
The primary trend was signaled as bullish on 3/10/22. On 2/14/22, GDX broke up above its 1/19/22 closing highs (highs of the first secondary reaction against the primary bear market that started off the 11/15/21 highs), unconfirmed by SIL. On 3/8/22, SIL did not break up above its 1/19/22 closing highs by a hair. However, on 3/10/22, SIL broke topside its 1/19/22 closing highs, provided confirmation, and hence a primary bull market was signaled.
Following the 3/10/22 highs, a minor two days pullback ensued. Obviously, it did not meet the time requirement for a secondary reaction against the primary bull market. On 4/1/22, GDX made higher highs. SIL confirmed GDX by making higher highs on 4/12/22. Thus, the primary bull market has been reaffirmed.
All in all, the primary and secondary trends are bullish.
Below are the updated charts. The blue horizontal lines display the highs of the last completed secondary reaction (the previous one on the left side of the charts) that were broken up by SIL & GDX triggering a primary bull market signal:
B) Market situation if one sticks to the traditional interpretation demanding at least three weeks of movement to declare a secondary reaction.
The primary trend was signaled as bearish on 8/9/2021, as was explained here.
On 1/28/22, both GDX and SIL made lower lows, which terminated a secondary reaction against the primary bear market.
From the 1/28/22 closing lows, both ETFs rallied until 3/10/22, which exceeds three weeks. Hence, the time requirement for a secondary reaction has been met. SIL rallied 23.4% and GDX 32.79%, thereby amply exceeding the Volatility-Adjusted Minimum Movement –VAMM- (6.75% for SIL and 6.15% for GDX). Therefore, the extent requirement was also fulfilled. Hence, there is a secondary reaction against the primary bear market.
Following the 3/10/22 closing highs, there was a two days pullback. SIL fell 6.64% and GDX 3.67%. Given that not even one ETF exceeded the VAMM, the pullback lacked the extent to set up both ETFs for a primary bull market signal.
However, we know that we have an alternative entry when markets do not oblige and do not readily produce the awaited setup for a primary bull (or bear) market signal. In this case, the highs of the last completed secondary reaction are a valid price level to be jointly broken up to signal a new primary bull market.
GDX made its last completed secondary reaction closing highs on 11/15/21 at 34.90. Such highs were breached by GDX on 3/1/22 at 35.86. SIL made its last completed secondary reaction closing highs on 11/12/21 at 41.91. As of this writing, SIL has not bettered the 11/12/21 highs and has not confirmed GDX. Therefore, no primary bull market has been signaled.
All in all, the primary trend is bearish, and the secondary trend is bullish.
The charts below show the current situation. The purple rectangles display the two last secondary reactions against the primary bear market. The blue horizontal lines display the highs of the last completed (the previous one, not the current one) secondary reaction. A primary bull market will be signaled once SIL breaks up above that level. The tiny orange rectangles inside the purple rectangles on the right side of the charts, show the small pullbacks that lacked extent to set up both ETFs for a primary bull market signal.
Overview: The spreadsheet below displays the primary trend in the pairs SLV/GLD and SIL/GDX when we appraise them with either the "shorter-term" or "longer-term" interpretation of the Dow Theory. The red color displays a primary bear market, and the blue displays a primary bull market.
Sincerely,
Manuel Blay
Editor of thedowtheory.com
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