Let's get started with our Dow Theory commentary in this blog for today.
An interesting article in The Reformed Broker
Some days ago, The Reformed Broker posted an interesting article differentiating between "good" and "bad" new highs.
It suggests that the news highs recently made are "good ones" and will hold.
However, as Business Insider notes, a correction is due:
Nevertheless, a correction is not the same as a primary bear market, thus when we look at the big picture we have:
1) A primary bull market, which is still young (i.e. less than 2 years).
2) New highs until very recently, which is always bullish.
3) New highs of "good quality" as per the article quoted above.
4) Bull markets that lasted 4 years tend to reach 5 years as explained here.
Thus, while a secondary correction is statistically due, the odds favor that the primary bull market will continue for some time at least.
The SPY, Industrials and Transports closed down in unison. The primary and secondary trends remain bullish.
Volume today was smaller than yesterday's, which makes it a bullish volume day as declining prices were not met by expanding volume. The overall pattern of volume remains bearish and continues to suggest a secondary reaction.
Gold and silver
GLD and SLV closed up. It seems likely (as already anticipated here) that a bottom has been made. However, technically and under Dow Theory it is too soon to call a change in the trend. Until now, both the primary and secondary trend remain bearish.
As to the gold and silver miners ETFs, both GDX and SIL closed up. The primary and secondary trend remains bearish.
The Dow Theorist