Bottoming In Progress For Metals

While I don’t have any further insight into the bigger picture than what I presented over the weekend, I wanted to highlight the smaller degree structure at this point in time.  But, the main takeaway is that we are likely completing this correction/pullback in the very near term.

Most specifically, I want to highlight the GLD and silver charts tonight within their micro structures.

As you can see from the GLD chart, todays likely marked the bottom of the wave 3 of this c-wave pullback.  In fact, we even came within pennies of our target box for this pullback.  Moreover, the rally seen in the last half of the day certainly makes a strong argument for being the commencement of wave 4 within this c-wave.  The target for this 4th wave rally is in the 138.50-138.75 region, which also coincides with the .382 retracement of wave 3.  And, as long as we hold that resistance box overhead, I am still looking for that 5th wave down to complete this c-wave.

However, if we are able to exceed that resistance box, then it would strongly suggest that the c-wave has completed, and we are already in the next wave 1 of the next larger degree rally phase, as outlined by the blue count.  For now, this will remain my alternative.

The same perspective applies in the silver chart.  As you can see, the MACD has now moved up off the floor, which is what it is supposed to do on a 4th wave bounce.  This is what sets up the lower price low for the 5th wave of the c-wave, coupled with the positively divergent higher low in the MACD.  I have also added a 4th wave box, and as long as the market holds that resistance, I will primarily expect a 5th wave lower to complete the c-wave.

Overall, the market is telling us a consistent picture at this time.  As long as this rally respects the resistance noted on the charts, then I am looking for a 5th wave lower low potentially even later this week.  And, whether we see that lower low or not, it is highly likely that the market is now in the final stages of this c-wave pullback, and will begin the next rally phase in the near term. 

GLD 8min
GLD 8min
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.