Be On The Lookout

As I write this update, gold seems to be a relatively clear 3-wave pullback, and silver is questionable as to whether it is 3 or 5.  You see, what would count as a 5th wave in silver is really so large it can also be considered a c-wave, which would then count it as a corrective a-b-c pullback.  So, where does that leave us?

Well, without a CLEAR 5-wave decline, it tells us that the probability that the larger c-wave decline is not highly likely.  And, we have to then seek other potential options.  

In silver, I have been outlining the potential for the next drop to be a (b) wave in a much larger (a)(b)(c) structure, as outlined in blue. And, that is a bit more probable right now.

In gold, since the decline is not clearly 5 waves - at least not until a lower low below this morning's low, I have to consider that we will rally back to the highs in an ending diagonal for the (c) wave of the b-wave.  A lower low below this morning's low will open the door for 5 waves down, and we begin looking at downside paths again.

As far as GDX, well, that is relatively clearly a 3-wave decline, but since we do not have 24 hour waves in that chart, this is an assumption based upon the spike down this morning to the 1.00 extension region.

So, for now, we must stay on our toes as the market can conceivably rally higher in the coming week or two, and if it does, it would seem silver could outperform gold on that rally.  But, a lower low below the after hours low would add more to the potential that we have 5 down, even if only as a leading diagonal. 

Going to remind you again that 4th waves are not easy.  They are quite variable and quite treacherous.  And, this one seems to be no different.