GOLD AND SILVER
A) Market situation if one appraises secondary reactions not bound by the three weeks dogma.
As I explained here, the primary and secondary trend was signaled as bearish on 6/30/22.
Following the 7/20/22 closing lows for GLD and 7/25/2022 for SLV, a secondary (bullish) reaction against the primary bear market developed. After that, a pullback ensued, setting up both metals for a potential primary bull market signal. You may find the in-depth explanation here.
On 8/30/22, SLV broke downside its 7/25 bear market lows. On 9/1/22, GLD broke down below its 7/20 bear low and confirmed SLV. Accordingly:
1) The setup for a potential primary bull market (brownish rectangle on the charts below) was canceled.
2) The secondary reaction was terminated.
3) The primary bear market has been reconfirmed.
The Table below shows all the price action that led to the reconfirmation of the primary bear market.
Below you have the updated charts. The blue rectangles show the secondary (bullish) reaction against the bear market. The brownish rectangles display the pullback that set up GLD and SLV for a potential bull market signal. The red horizontal lines highlight the primary bear market lows that have been broken down.
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 here, the primary and secondary trend was signaled as bearish on 6/30/22.
The rally that started off the 7/20/22 closing lows for GLD and 7/25/2022 for SLV did not reach at least 15 trading days on both ETFs, so we cannot talk of a secondary reaction. Therefore, the primary and secondary trends remain bearish.
Sincerely,
Manuel Blay
Editor of thedowtheory.com
