Thursday, November 30, 2023

Dow Theory Update for November 30: Secondary reaction for SIL and GDX signaled on 11/28/23

General Remarks:

In this post, I thoroughly explained the rationale behind using 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 for GDX and SIL turned bearish on 6/20/23. You may find an in-depth explanation HERE.

After some rallies that fizzled out before qualifying as a secondary reaction, at long last, the rally that started off the 4/10/23 bear market lows finally reached the time and extent requirement for a secondary (bullish) reaction against the primary bear market. The table below contains the relevant dates and prices:

So, now we wait for a >=2 days pullback exceeding the Volatility-Adjusted Minimum Movement (more about the VAMM HERE) on at least one ETF to set up GDX and SIL for a potential primary bull market signal. We don't require confirmation When dealing with this kind of “setting up” pullback, as I explained in depth HERE.  

The charts below show the price action that started off the Bear market lows (Step #1), the bounce (secondary reaction against the bear market) that followed (Step #2). The blue horizontal line shows the secondary reaction highs (Step #2), whose confirmed breakup entails a new primary bull market.  The blue rectangles highlight the secondary reaction (Step #2). The grey rectangles show rallies that did not qualify as a secondary reaction, and hence are ignored. 


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 6/20/23, as I explained HERE.

In this specific instance, the trend appraisal using the “long-term” version of the Dow Theory yields the same results as the “short-term” one. So, what I explained above applies fully to this section. The primary trend remains bearish and the secondary one is bullish. 


Manuel Blay

Editor of


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