3 . . . 2 . . . 1 . . . Blastoff - Market Analysis

Yes, I know this title is quite dramatic, but when you have a certain number of 1’s and 2’s on the chart, it is either going to ignite in a blastoff-type of move, or it will invalidate.  That is where the market stands right now.

Now, as far as this “fat-finger” sell off that occurred earlier this week, it is really hard to opine about it, especially since it gave gold and and silver futures slightly lower lows, which recovered rather quickly.  So, to be honest, it is hard to really know what to make of those charts at their lows right now, as it may be one of those few moves you may have to ignore.  They happen maybe once every 2/3 years.

But, as far as GDX is concerned, it has retained a very strong bullish potential.  Since we view Elliott Wave from a probabilistic sense, it does not suggest that we will have a guaranteed break out in this set up.   But, it does give us information that the market is in a prime position for a major break out and strong rally to occur.  Again, if it actually does so is up to the market, and we simply read its messages.

Moreover, Zac and Garrett did their usual miners webinar last night, and the great majority of the miners we follow are all set up to break out in similar stances as the GDX.  Again, while it does not guarantee a break out will occur, it does tell us clearly that the even the individual charts within the market are in a position to break out in a strong move.

In the micro structure, it would seem we are now feeling around for the bottom of a c-wave in another micro 2nd wave flat. The next strong move over 22.85 should ignite this rocket-ship.  Micro support now resides at 22.15, 22, and 21.75.  As long as we hold support, and rally through 22.85 strongly, we are in a position to see the 28 region rather quickly. And, clearly, a break of the 22 region would begin to concern me.

So, as I noted, we are at the point in the set up where the market has to either put up or shut up.   It’s now your move Mr. Market.

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Avi Gilburt is founder of ElliottWaveTrader.net.