For the last two weeks, my primary expectation has been that the metals market will trace out an a-b-c correction/pullback. Thus far, we have the a-wave in place, and what seems to be a potentially completed b-wave in both gold and silver.
In fact, not only do we have a potentially completed b-wave in silver and gold, but we also have a 5-wave structure to the downside seen this week from the corrective high we struck several days ago. So, to make this rather simple, as long as we remain below the premarket high struck in silver and gold, I am viewing this as a 1-2 structure to the downside in both silver and gold as having started the c-wave down.
But, I want to note that GLD does not have this set up as clearly evident since the rally high struck in the futures earlier this week was not seen in the GLD. But, this will remain my primary perspective as long as the high struck in gold this week in the 1568 region remains in place.
The other chart that does not seem to have this immediate downside set up is the GDX. But, I suspect that the same reason for which we do not see this set up in the GLD is the same reason as it not being evident in the GDX.
While my preference has been that this b-wave would take more time and even take us a bit higher, I have to respect the 5-wave downside structure we have in place in both gold and silver. And, unless the high struck this week it broken, I have to be on alert for more immediate downside follow through in the complex. Should we break down below the low struck this week in the complex, that would provide strong confirmation that the c-wave down is in progress.
Lastly, should gold and silver be able to move over the high struck this week before breaking down below this week’s low, it would invalidate the immediate downside set up and have us remain in the b-wave segment of this correction/pullback.
(I apologize for it not coming out earlier, but my connection has not been allowing me to post charts).