August 7, 2014

Dow Theory Update for August 7: Stocks extend their decline and Secondary reaction continues

Manuel Blay

Gold’s surge does not change any trend

Mini Dow-Theory Update for today.

Yesterday, and the day before yesterday I announced a secondary reaction for stocks.

Today the SPY, Industrials and Transports closed down and deepened the ongoing secondary reaction. The chart below highlights (red rectangles) the (bearish) secondary reaction against the primary bullish trend.

SPY,+INDU+TRANSPORTS+sec+reaction7+august+2014

Orange rectangles display the ongoing secondary reaction against the primary bull market

The primary trend remains bullish, as explained here, and more in-depth here.

The primary trend was reconfirmed as bullish on October 17^th, 2013, and November 13th, 2013 and March 7th, 2014, for the reasons given here, here and here.

So the current primary bull market signal has survived three secondary reactions.

The secondary trend is bearish, as explained here and here.

Precious metals

As to gold, in spite of today’s surge, trends remain unchanged.

Dittofor SIL and GDX.

Sincerely,

The Dow Theorist