Bearish Count Must Be Primary
Over the weekend, I provided some conjecture about a potential pattern which can still give us more whipsaw in this market, if it chose to push out the bottom for several more months. And, that pattern suggested that the GLD would hold the 107 level. As we can see, we have broken the 107 level, which makes that pattern potential an alternative at this point in time (as noted in blue), and the purple count the primary.
But, if you look at both the GLD and the GDX, my “assumption” is that the next rally – which should be corrective in nature - can very well be a sizeable retracement, which works better with the overall downside targets, especially in the GDX. So, my “assumption” is that we will still have some more whipsaw to deal with, but I am not of the opinion at this point in time that it will be anything but a corrective deep retrace in a wave ii in silver and GDX, and a (b) wave in GLD.
In both the GLD and the GDX, it really looks like we still need a bit lower before we can consider this segment of the decline completed. So, I think we may still see further downside over the next day or so. As long as the GDX holds the 13.95 level, I am going to be counting this decline as purple wave i down.
Furthermore, I think it may take us several weeks until we complete the wave ii/(b) which can take us into the Thanksgiving time frame. In fact, this bigger downside pattern would have us bottoming into the end of the year, or even early next year, before the bottom is struck and a strong rally begins, which is much like what we have seen over the last several years. But, this time, it should be the final bottom we see, and the start of the bull market once we strike this next lower low. And, once we see a 5 wave structure off those lows, I will be “calling” the long term bottom in place.
Ultimately, I am still “feeling out” this bottoming right now, and as long as we maintain over 103GLD and 13.95GDX, I will be expecting a deep retracement back up over the few weeks. But, please note that there is still come conjecture in the timing I am presenting, and we will need to see a bottoming over the next day or two to be more certain.