Stocks “in the clear”. Primary bull market reconfirmed
and secondary reaction extinguished
I will be travelling with a quite heavy schedule in the following days. Hence, it is unlikely that I find time to update this blog in the next 7 days. This remark applies especially to GLD and SLV. They are on the verge of a primary bear market signal. Thus readers of this blog, based on what I say today, should do their own homeworks in case SLV and GLD finally violated their secondary reaction lows.
As to US stocks, the odds favor at least two weeks without news. The news have been made today.
US STOCKS
The primary trend is bullish
since November 21st, 2016, as explained here and here.
Today the Transports broke up
their March 1st, 2017 primary bull market closing highs. By doing so
it has confirmed the S&P 500 (breakout on May 10th) and the
Industrial (breakout on June 1st).
Here you have an updated
chart:
 |
| Stocks "in the clear". Any new socondary reaction is to be counted from the higher highs |
The implications of today’s
breakout are as follows:
1) The primary bull market has
been unambiguously confirmed.
2) The secondary (bearish)
reaction against the primary bull market is herewith extinguished. We “reset”
our counter to zero. Any new future secondary reaction is to be counted from
the higher highs.
3) Thus, the secondary trend is
labeled as bullish as of today.
4) As far as the “Rhea/Classical”
Dow Theory is concerned, today’s breakout confirm the Industrials and re-confirm
the primary bull market. While it was debatable (according to alternative interpretations
of the Classical Dow Theory) whether there was to begin with a secondary
reaction against the primary bull market, higher confirmed highs make clear
that both the primary and secondary trend is bullish (more about the two
alternative interpretations here)
While nothing is certain, it
seems that the trade that started on November 21st, 2016 is going to
be a winner. Barring a catastrophic overnight market crash, the odds favor a
winning trade. Time builds profits.
As an aside, please mind that
the trend when appraised with weekly bars as per Dow Theory rules, is bullish.
GOLD AND SILVER
The primary trend turned
bullish on April 12th, 2017 as explained here
The secondary trend is
bearish, as explained in depth here.
SLV and GLD set up for a
primary bear market signal, as explained here.
On June 6th, 2017
GLD broke up its April 18th, 2017 primary bull market closing high
(bottom chart, blue arrow). However, SLV did not confirm by a wide margin
(which I interpret as being bearish), which implies that the primary bull
market was not confirmed. Immediately thereafter, both precious metals have
declined with gusto. Today, SLV closed exactly at their 5/9/2017 secondary
reaction lows. GLD barely failed to do so. All in all, very close to a primary
bear market signal.
If SLV and GLD jointly
violated their primary bear market closing lows (red horizontal lines), a
primary bear market would be signaled.
Here you have an updated
chart:
 |
| SLV and GLD on the verge of a prikmary bear market signal |
GOLD AND SILVER MINERS EFTs
Nothing seems to happen with
the gold and silver miners ETFs. No news as usual.
Here you have an updated
chart:
 |
| Time pases by and nothing happens with SIL and GDX |
The primary trend is bearish,
as was explained here and here.
The secondary trend is bullish
as explained here
As was explained here, SIL and GDX have set up for a primary bull market
signal.
Sincerely,
The Dow Theorist
