Could We Be Topping?
By
Avi Gilburt
For a few weeks now, I have maintained a primary count that is looking for a lower low in GDX and silver due to the lack of a completed pattern on the downside for both. Yet, I am unsure if GLD will actually see a lower low at this time.
So, let’s review GDX and silver a bit more in-depth.
Thus far, the market is tracking the c-wave rally I have been looking for in silver, so that we can complete a [b] wave flat pattern within a larger degree 2nd wave. This means that once we do top out, I am seeking a [c] wave decline in the coming weeks, which should ideally point us down to the 21.50 region (take note, I am on the Dec contract). The main reason that I am targeting the 21.50 region is that is generally where I expect we will see an [a]=[c] target. We have not yet confirmed a top to the [b] wave, but I am guestimating at this time.
As you can see from the attached 8-minute silver chart, as long as we hold the micro support, I can reasonably expect one more push towards the 25.60 region. However, if we begin to break support and it takes shape as an initial 5-wave decline, then I will assume we have begun the [c] wave down.
In GDX, as long as this rally is contained within the target box we set for this a-b-c rally, I am also expecting a lower low in GDX. A break down below 29 would be an initial indication that the decline has begun. Alternatively, should GDX be able to take out the resistance box and continue to the higher target box to complete 5-waves up, then I will adjust my perspective and go into a buy-the-dip mode. For now, I am still expecting that lower low since the final decline in GDX (and a number of miners including NEM) suggest they are missing that final 5th wave lower low in their respective c-waves.
But, again, I want everyone to take a step back and look at the daily charts. With a lower low or not, they are primed to finally begin that next larger rally for which we have been “patiently” waiting. Again, while my primary expectation is for many charts to still see that lower low in the coming weeks, please recognize that this is likely a buying opportunity.
