Wednesday, April 3, 2024

Melt up: gold and silver soar, triggering a new Dow Theory bull market signal on 4/2/24

 SIL and GDX are also in a Bull market since 4/3/24

Overview: On 4/3/24, SLV finally surpassed its 12/1/23 closing high at 23.33 and confirmed GLD, which had breached its 12/27/23 highs on 3/1/24. So, now, according to the Dow Theory, a primary bull market in gold and silver has been signaled.

Today, 4/3/24, SIL and GDX also triggered a new primary bull market signal by breaking above their 12/27/23 closing highs. In the next few days, I will write more about SIL and GDX.

General Remarks:

In this post, I extensively elaborate on the rationale behind employing two alternative definitions to evaluate secondary reactions.

GLD refers to the SPDR® Gold Shares (NYSEArca: GLD®). More information about GLD can be found HERE.

SLV refers to the iShares Silver Trust (NYSEArca: SLV®). More information about SLV can be found HERE.

A) Market situation if one appraises secondary reactions not bound by the three weeks and 1/3 retracement dogma.  

As I explained in this post, the primary trend was signaled as bearish on 2/13/24.

Following the 2/13/24 lows, a strong rally ensued with no meaningful pullback. Accordingly, the relevant highs to be surpassed were the 12/1/23 closing highs for SIL at 23.33 and 12/27/23 for GDX at 192.59. On 3/1/24, GLD broke above such highs without SIL confirming. On 4/2/24, SIL confirmed signaling a primary bull market.

Check out the chart below for a visual walkthrough of the recent price action. The blue rectangles indicate the rally that began after the lows on 2/13/24. The small grey rectangles represent a pullback that failed to meet the criteria for triggering an ordinary buy signal in both ETFs. In the absence of this setup, the highs of the previous bull market become the relevant highs to surpass.

Thus, both the primary and secondary trends are currently bullish.

B) Market situation if one sticks to the traditional interpretation demanding more than three weeks and 1/3 confirmed retracement to declare a secondary reaction.

As I explained HERE, the primary trend was signaled as bearish on 6/21/23.

In this post, I explained that the setup for a potential primary bull market signal had been completed.

On 12/27/23, GLD surpassed its 12/12/23 bounce high, which was unconfirmed by SLV. On 4/2/24, SLV surpassed its 12/1/24 highs, providing confirmation, and thus, a primary bull market has been signaled.

The table below contains all the details:

The charts below show the most recent price action. The blue rectangles display the secondary reaction against the bear market (Step #2 in the above table). The brown rectangles highlight the pullback that set up both ETFs for a potential primary bull market signal (Step #3). The blue horizontal lines show the relevant price levels to be jointly surpassed for a primary bull market signal. The red lines indicate the 10/5/23 primary bear market’s last lows, whose violation would signal a new primary bear market (very unlikely at this juncture).


Manuel Blay

Editor of

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