Bottoming Set Up In Place For GDX
With the rally right into our target region for a b-wave of wave (ii), the market set us up quite nicely for a c-wave down. And, remember, c-waves often feel like crash events, in order to scare participants out of the market before a reversal.
However, in order for me to confidently view us as bottoming in the c-wave of wave (ii), I would really prefer to see divergences on my 8 minute chart. Moreover, those a divergent low set up should develop on a wave 4 rally back to micro resistance. That would be the ideal set up I would want to see to view us as bottoming, and about to embark on a very strong move to 28+.
Now, what is interesting about the GLD and silver charts is that neither of them look like a standard a-b-c structure to the downside. While silver certainly got a bounce today, and provided us with a nice MACD divergent low set up we see at bottoming in the complex on our 144-minute chart, the pattern is certainly a bit unusual. Moreover, GLD has not dropped as much as I had expected it to. So, these two issues still bother me in the back of my mind.
But, as long as GDX provides us with the appropriate set up we have been following, and remains over the May low, it really is in a textbook set up for a powerful move higher. However, a break of the May low would concern me, and make me question the larger pattern. But, we can address that should that occur. For now, I am going to look for a bounce tomorrow to set up a nice divergent bottom in the 8-minute chart.