The setup for a potential primary bull market in SIL and GDX was completed on 2/27/25
Overview: Despite declining stock prices, gold and silver miners’ ETFs (GDX and SIL) demonstrate resilience and completed on 2/27/25 the setup for a potential primary bull market signal.
As of this writing, neither GDX nor SIL haven broken up the relevant price levels for a new bull market.
Gold and silver themselves remain in a firmly established bull market.
Once the stock market correction concludes, I anticipate that SIL and GDX will experience an upward move, triggering the onset of a new bull market.
General Remarks:
In this post, I extensively elaborate on the rationale behind employing two alternative definitions to evaluate secondary reactions.
SIL refers to the Silver Miners ETF. More information about SIL can be found HERE.
GDX refers to the Gold Miners ETF. More information about GDX 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 trend was signaled as bearish on 12/18/24.
As I explained here, a secondary (bullish) reaction against the bear market was signaled on 1/30/25.
This rally stopped on 2/13/25, and a pullback followed that lasted >=2 days and exceeded the Volatility-Adjusted Minimum Movement (more about the VAMM HERE) on at least one ETF to set up GDX and SIL for a potential primary bull market signal. We don’t require confirmation When dealing with this kind of “setting up” pullback, as I explained in depth HERE. Such a pullback set up both ETFs for a potential primary bull market signal. The Table below displays the relevant dates and prices:
Therefore, now we have the following options:
- A primary bull market will be signaled if GDX and SIL jointly surpass their 2/27/25 closing highs (Step #2 in the above table) at 42.5 (GDX) and 37.32 (SIL)
- If GDX and SIL continue going down and jointly break down below their 12/30/25 bear market lows, the primary bull market setup would be canceled, the secondary reaction terminated, and the primary bear market would be reaffirmed.
The charts below illustrate the latest price movements. The blue rectangles indicate the ongoing (bullish) secondary reaction amidst the prevailing primary bear market. The brown rectangles mark the present retracement. The blue horizontal lines denote the peak levels of the secondary reaction (Step #2), a breach of which would signal the start of a new primary bull market, while the red horizontal lines highlight the troughs of the bear market (Step #1), a violation of which would reinforce the bearish trend.
B) Market situation if one sticks to the traditional interpretation demanding at least three weeks of movement to declare a secondary reaction.
As I explained in this post, the trend was signaled as bearish on 12/18/24.
In this instance, the trend assessment using the “long-term” Dow Theory aligns with the “short-term” version. Thus, my earlier explanation applies here. The primary trend remains bearish, the secondary one is bullish, with the setup for a potential primary bull market now complete.
Sincerely,
Manuel Blay
Editor of thedowtheory.com
