Dow Theory Update for August 14: US stock indices set up for primary bear market signal

 Trends for gold, silver and their ETF miners unchanged

I am writing before the close, so things might change. Readers beware.

 

US STOCKS

The primary trend as per Schannep’s Dow Theory is bullish since March 1^st, 2019 when both the Industrials and the S&P 500 closed at +19% from the 12/24/2018 bear market closing lows.

However, “capitulation” suggested the opening of a partial commitment to stocks on the very day of the market bottom (12/24/2018). More about that partial commitment here.

  

And more about “capitulation” in general in the following links:

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html

http://www.dowtheoryinvestment.com/2019/05/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation_11.html

On August 2^nd, 2019 a secondary reaction against the primary bull market was signaled, as explained here. As of this writing US stocks indices have further declined (in the vicinity of -6%).

On 08/08/2019 the S&P 500 rallied more than 3% off the secondary reaction closing lows (blue rectangle on the chart below) thereby setting up US stock indices for a primary bear market signal. The Industrials and Transports did not manage to rally 3%. However, just one index rallying more than 3% suffices to set up stocks for a primary bear market signal. More about when we don’t require confirmation here.

http://www.dowtheoryinvestment.com/2012/11/dow-theory-special-issue-is-primary.html

Hence the 08/05/2019 secondary reaction lows are the level to be jointly broken (the S&P 500 must partake) so that a primary bear market is signalled. On 08/12/2019 the Transports by closing at 10033.58 violated its secondary reaction lows (10040.23). However, neither the S&P 500 nor the Industrials did confirm and hence no primary bear market was signalled.

Here you have an updated chart.

Setup for primary bear market completed (blue rectangle)

As per the Rhea/classical Dow Theory, the secondary reaction has not changed. Since the Classical Dow Theory uses only two indices (Industrials and Transports) and the Transports have not bettered their primary bull market closing highs, the secondary reaction which started on April 2019 remains in force, and, hence, the setup for a primary bear market has not changed.

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 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. 

Sincerely,

The Dow Theorist

Dow Theory Update for August 6: Trends unchanged; precious metals and US bonds continue making higher highs true to their primary trend.

Secondary reaction for US stocks continues

 I am writing before the close. So things might change. 

US STOCKS

The primary trend as per Schannep’s Dow Theory is bullish since March 1^st, 2019 when both the Industrials and the S&P 500 closed at +19% from the 12/24/2018 bear market closing lows.

However, “capitulation” suggested the opening of a partial commitment to stocks on the very day of the market bottom (12/24/2018). More about that partial commitment here.

  

And more about “capitulation” in general in the following links:

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html

http://www.dowtheoryinvestment.com/2019/05/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/07/dow-theory-special-issue-capitulation_11.html

On August 2^nd, 2019 a secondary reaction against the primary bull market was signaled, as explained here. As of this writing US stocks indices have further declined (in the vicinity of -6%). Once we have a rally of at least +3% on one or more indices, the setup for a primary bear market signal will have been completed. For the time being we sit and wait. Thus, the secondary trend is bearish.

Here you have an updated chart. The orange rectangles display the secondary reaction.

Full-fledged secondary reaction against primary bull market

As per the Rhea/classical Dow Theory, the secondary reaction has not changed. Since the Classical Dow Theory uses only two indices (Industrials and Transports) and the Transports, and the Transports have not bettered their primary bull market closing highs, the secondary reaction which started on April 2019 remains in force, and, hence, the setup for a primary bear market has not changed.

 

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.

Here you have an updated chart:

 

Primary bull market continues

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.

Here you have an updated chart:

 

Primary bull market

Long term US interest rates (20 years and 10 years)

Although I do not usually report about these two important ETFs (TLT and IEF), and it is pity since interest rates are especially suited to the Dow Theory. However, I lack the time to post about all the Dow Theory “events” I see. It suffices to say that they are displaying a beautiful bull market, even though when it started many were predicting the demise of the secular bull market in bonds. Since the onset of the primary bull market some 8 months ago, there has not been a single secondary reaction. This is a truly remarkable primary bull market. I wrote more about it here.

Here you have an updated chart:

 

A super clean (and strong) primary bull  market. No secondary reaction has been hitherto signaled

Sincerely,

The Dow Theorist

Dow Theory Update for August 2: Secondary reaction for US stocks signaled today

Primary and secondary trend for gold, silver and their ETFs miners bullish

This post has been amended on 08/06/2019. I thank Jack Schannep for spotting two mistakes I inadvertently made when determining the onset of the secondary reaction. First, The Industrials had been declining since 07/15 and not 07/23/2019, as I wrote. Secondly, I twisted the formula for calculating declines on my spreadsheet so the percentages shown were close to accurate but not totally correct. However, the secondary reaction was correctly signaled (exactly at the right moment). The date of its signalling does not change. What follows is the amended version. 

US STOCKS

The primary trend as per Schannep’s Dow Theory is bullish since March 1^st, 2019 when both the Industrials and the S&P 500 closed at +19% from the 12/24/2018 bear market closing lows.

However, “capitulation” suggested the opening of a partial commitment to stocks on the very day of the market bottom (12/24/2018). More about that partial commitment here.

  

And more about “capitulation” in general in the following links:

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation.html

http://www.dowtheoryinvestment.com/2019/03/dow-theory-special-issue-capitulation_22.html

http://www.dowtheoryinvestment.com/2019/05/dow-theory-special-issue-capitulation.html

The secondary trend turned bullish (official end of secondary reaction) on 06/20/2019, when both the Industrials and the S&P 500 broke up their respective primary bull market closing highs, and, hence, the secondary reaction which was signaled on May 9, 2019 as explained here. and here was ended.

The current decline does qualify as a new secondary reaction under Schannep’s rules. As a reminder, the rules for a secondary reaction are:

a)     A decline that interrupts the primary bull market.

b)     That lasts a minimum of 10 calendar days on at least 2 of the 3 indices.

c)     With at least 8 trading days as the average of all three indices.

The Transports made their last recorded closing high on 07/15/2019. The Industrials did so on 07/23/2019. The S&P 500 did so on 07/26/2019. Hence both the Industrials and the Transports have been amply declining by more than 10 calendar days. The S&P 500 have declined for 5 trading days. The average time of decline of the three indices amounts to 8.66 trading days, which is more than 8 trading days.

As to the extent requirement all the indices have declined more than 3%, which implies that this requirement has also been met. Here you have a spreadsheet

Hence, we can declare that with date of today (August 2^nd, 2019) a secondary (bearish) reaction against the primary bull market has been signalled.

Here you have an updated chart.

Secondary reaction for US indices signaled today

 As per the Rhea/classical Dow Theory, the secondary reaction has not changed. Since the Classical Dow Theory uses only two indices (Industrials and Transports) and the Transports, and the Transports have not bettered their primary bull market closing highs, the secondary reaction which started on April 2019 remains in force, and, hence, the setup for a primary bear market has not changed.

Here you have an updated chart as per the “Rhea/Classical” Dow Theory.

 

Nothing has changed as per the Classical Dow Theory. The "old" secondary reaction continues in force

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.

Furthermore, currently SLV and GLD setup for a primary bear market signal as was explained 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.

Here you have an updated chart. The blue horizontal lines display the last primary bull market highs.

 

Primary bull market reconfirmed on July 18th, 2019. End of secondary reaction.

  

GOLD AND SILVER MINERS ETFs

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

The secondary trend is bearish (secondary reaction) since 4/18/2019 when GDX violated its previous 03/06/2019 closing lows (and confirmed SLV which had done so several days before), as was explained here. and here

Furthermore, currently SIL and GDX setup for a primary bear market signal as was explained here.

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.

Here you have an updated chart. The blue horizontal lines display the last primary bull market highs.

On 07/17/2019 SIL confirmed GDX and the primary bull market was reconfirmed. End of secondary reaction signaled

Sincerely,

The Dow Theorist