Also in Search of a Bigger Retracement

I know the metals market has been trying everyone’s patience of late, and the action has been very erratic, but I have to still maintain my prior perspective, which was reiterated over the weekend.

While the “possibility” certainly exists that the last high was all of the corrective bounce we will see in this pattern before we head to the lower targets we have set out on the GDX, for example, I still have a hard time seeing that a 3-week decline is going to be retraced by a 3-day rally.  Again, even though this is certainly “possible,” it is generally the lower probability expectation for these types of corrective rallies.

So, it leaves me to maintain my perspective that we see a bigger rally.  And, as long as the lows hold from yesterday, I will be looking for that rally to begin imminently.  Should we break yesterday’s low, then I would have to begin to reconsider that expectation.

But, I think that too many are attempting to trade corrective structures aggressively to the upside, and that is not the purpose for me providing these expectations.  Rather, I am personally looking to be able to add to my current hedges should we get that rally that I want to see. Remember, the ultimate point of my perspective is that we are likely setting up for a c-wave down in wave ii, so I am looking to set up for that potential, not necessarily aggressively trading for the upside possibilities.

And, as I noted over the weekend, I will move to my more immediately bullish counts should the GDX break out over 30.50-31.50, GLD over 132, and silver over the August high.  Until then, I am still viewing any rally as potentially part of the overall corrective pattern of the market.

Avi Gilburt is founder of