Gold and Silver are also in a bull market
Overview: GDX and Sil underwent a secondary reaction against the primary bull market. Confirmed higher highs by both ETFs have reconfirmed the primary bull market.
Gold and Silver are in a bull market of their own, as I explained HERE.
I see most assets going to the roof. Are savvy speculators sensing that a wave of liquidity is going to be unleashed soon?
General Remarks:
In this post, I extensively elaborate on the rationale behind employing two alternative definitions to evaluate secondary reactions.
GLD refers to the SPDR® Gold Shares (NYSEArca: GLD®). More information about GLD can be found HERE.
SLV refers to the iShares Silver Trust (NYSEArca: SLV®). More information about SLV 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 primary trend was signaled as bullish on 4/3/24. Following the 5/20/24 highs, both ETFs dropped until 6/13/24 (GDX @33.15) and 7/1/24 (SIL @30.9). Such a drop qualified as a secondary reaction against the bullish trend.
Following such lows, a strong rally ensued. On 7/11/24, GDX broke above its 5/20/24 closing highs (@37.24). On 7/16/24, SIL confirmed by surpassing its 5/20/24 closing highs @35.93.
So, the confirmed breakup above the last recorded primary bull market highs implies that the secondary reaction against the bull market has been canceled, and the primary bull market has been reconfirmed.
The charts below illustrate recent price movements. The brown rectangles highlight the secondary reaction within the primary bear market. The small blue rectangles on the right show the initial days of a rally that set up both ETFs for a potential primary bear market signal, which ultimately did not occur. The blue horizontal lines indicate the last recorded primary bull market highs that needed to be surpassed to reconfirm the bull market.
Therefore, the primary and secondary trends are now 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.
In this post, I explained that the primary trend was signaled as bullish on 4/3/24.
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 bull market that has been successfully terminated by confirmed higher highs.
Therefore, the primary and secondary trends are now bullish.
Sincerely,
Manuel Blay
Editor of thedowtheory.com
