In the meantime, the primary trend is still bullish, but it could change soon
Overview: GDX and SIL underwent a secondary reaction against the primary bull market. The recent price action completed the setup for a potential bear market signal on 3/25/26. Please mind the word “potential”, which implies that the primary bull market remains in force.
Gold and Silver are also in a secondary (bearish) reaction against the primary bull market but have not yet completed the setup for a potential primary bear market.
General Remarks:
In this post, I elaborate extensively 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 bullish on 6/2/25.
From the 2/27/26 closing highs, both SIL and GDX dropped until 3/20/26. The decline met the time and extent requirement for a secondary (bearish) reaction against the primary bullish trend.
Following the 3/20/26 lows, there was a 3-day rally that exceeded the Volatility-Adjusted Minimum Movement (VAMM) on GDX. SIL also rallied, but percentage-wise did not exceed its VAMM. Please remember that we don’t require confirmation for the final rally that completes a bear (or bull) signal setup. More information is in this post.
The table below gives you the relevant dates and prices:
So, now there are two options:
- If SIL and GDX surpass their 2/27/26 highs on a closing basis (Step #1 in the above table), the secondary reaction and setup for a potential bear market signal will be canceled.
- A primary bear market will be signaled if SIL and GDX break down below their 3/20/26 lows (Step #2).
The charts below illustrate recent price movements. The brown rectangles highlight the secondary reaction within the primary bull market. The small blue rectangles on the right show the early days of a rally that set up both ETFs for a potential primary bear-market signal. The blue horizontal lines indicate the last recorded primary bull market highs that must be surpassed to reconfirm the bull market (Step #1). The red horizontal lines highlight the 3/20/26 lows (Step #2).
As of this writing, the primary trend is bullish, and the secondary one is bearish.
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 bullish on 6/2/25.
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 bull market, and the setup for a potential bear market signal has been completed.
As of this writing, the primary trend is bullish, and the secondary one is bearish.
Sincerely,
Manuel Blay
Editor of thedowtheory.com
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