Break Out in Metals

So, the GDX and GLD have now gapped up over their pivots.  The pullbacks thus far have been unusually shallow, which is typical of metals when they enter a bullish trend.  In fact, the pullbacks we have seen have been running corrections, meaning that we have seen c-waves of pullback higher than the a-waves.  That is very bullish.  And, I did not expect that just yet, which is why I thought there could be just one more pullback before the break out. But, the market had other immediate ideas.

The question now becomes whether we are going to simply blast off from here.  My personal perspective is that the market is set up for that blast off.  And, until I see some divergence in the MACD on the daily charts of GDX or GLD, that is going to remain my perspective.  Both those charts are still pointing directly higher, so my perspective remains higher right now.

Most specifically, as long as we do not break back below the market pivots on the 8-minute charts, pressure remains higher in the complex.  And, as we continue higher, I will continue to move that support higher.

But, I still have to at least alert you to the manner in which Zac and Garrett as seeing a number of miner charts at this moment.  Many of them seem to be structured as diagonals, which means we may see some more complexity in the coming months.  If we break below the pivot before breaking out higher, then the alternative in yellow is what they have been tracking in a number of mining stocks.  However, if we continue to break out, then they are tracking this rally as a bigger diagonal, also in a 3rd wave within that diagonal, but it likely means that extensions that I am seeking on this rally will not be attained.

I want to also note that both patterns are bullish in the intermediate to longer term – meaning that it is highly likely we will see much higher levels by the time we get towards 2020.  But, the path is the only difference.

As for me, I am going to continue to track the standard impulsive structure as long as the market does not suggest otherwise.  Silver, GLD and GDX are all set up to rally in a heart of a 3rd wave at this time, and until some support is broken, this is how I intend to track them.  But, at the same time, I will be keeping an eye out for the potential being tracked by Zac and Garrett should a support break in the coming weeks.

GDX-8min
GDX-8min
GDXdaily
GDXdaily
GLD 8min
GLD 8min
GLD-daily
GLD-daily
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.