Gold and silver indecisive
Let's review the state of the stock market under the prism of the Dow Theory.
The SPY, Transports and the Industrials closed up. Technically, nothing has been accomplished. However, if this rally continues and the highest highs hitherto made are jointly bettered by at least two indices, then a primary bull market signal would be signaled. Which are the highs to keep an eye on?
|Date High||Price (close)|
As you can see in the table above, the highs to track are the latest highs made by each index prior to the onset of the first primary bear market leg.
There are three ways a primary bull (bear) market can be signaled. The most typical and frequent patter (for a bull market) is one of a primary bear market leg (as the one we have just had), a rally off the lows (as the current one) and pullback that fails to break jointly the prior lows and a subsequent rally breaking above the last rally highs.
However, Rhea wrote about two alternative ways of signaling a new primary bull (bear) market. One of these "alternative" signals is the one I am referring in this post in this Dow Theory blog. When the highest highs hitherto made are jointly broken out, we can talk of a new primary bull market. In a future post, I will develop further the three signals that, independently, may signal the onset of a new bull market. This would be an important post, since this vital aspect of the Dow Theory is not so easy to unearth from Rhea's writings.
Volume today was higher than Friday's. Since stocks were up, it has a bullish connotation.
Technically, and under Dow Theory, the primary trend for stocks remains bearish and the secondary trend bullish.
As to gold and silver both closed up today. Technically, nothing has changed. The primary trend remains bullish and the secondary trend bearish.
GDX closed up, and SIL closed down. Technically, nothing has changed. The primary trend remains bullish and the secondary trend bearish.
The Dow Theorist