The market seems to have completed what we have been tracking as a wave iii in GLD and silver, and even the GDX has joined the party this week with a break through of resistance, and completing what also seems to be wave (v) of iii.
But, the last time I looked, 3 did not equal 5. And, we need a full 5 waves up to be more confident that a significant bottom may have been struck in this complex a few weeks ago.
As the charts have outlined, we expected the market to provide us with a 4th wave pullback when we completed wave iii, and today seems to suggest it is underway. While I can reasonably view this drop as all of wave iv in GDX, I am not sure that GLD and silver have enough of a wave iv to be significant enough as a higher probability count.
So, for this reason I am going to primarily view today’s drop as just the a-wave of wave iv. However, if the market screams higher sooner rather than later to complete wave v, I will certainly not complain, as that would be a very bullish indication overall.
The main point I want to stress is that as long as the metals charts remain over the smaller degree support regions noted on those charts, then I am viewing this as a 4th wave, with a 5th wave to come. However, should the market break below these supports, that is suggesting that this corrective pullback off the September highs has still not yet likely completed. But, for now, I am going to make the assumption that support will hold, unless proven otherwise.