Overview: While most stocks are amid a severe correction, the gold and silver miners’ ETFs have shown remarkable strength, which, in my opinion, is proof that precious metals are poised for a big and sustainable run-up.
The trend for gold and silver is also bullish.
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.
And in this post, I explained that the setup for a potential primary bull market signal had been completed.
The table below contains the key prices and dates:
The chart below illustrates the latest price movements. The blue rectangles indicate the secondary reaction (Step #2). The brown rectangles mark the pullback (Step #3) that set up SIL and GDX for a potential primary bull market signal. The blue lines highlight the secondary reaction highs whose breakup signaled a new bull market.
So, now the primary and secondary trends are bullish.
B) Market situation if one sticks to the traditional interpretation demanding more than three weeks and 1/3 confirmed retracement 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 long-term application of the Dow Theory coincides with the shorter-term version, so there was a secondary reaction against the primary bear market and higher highs signaled a new bull market
So, now the primary and secondary trends are bullish.
Sincerely,
Manuel Blay
Editor of thedowtheory.com
