Filling In More Of The 2nd Wave

Yes, I am going to again repeat that this has been an exceptionally complex corrective structure which has frustrated many of you. In fact, I heard discussion which seemed as though some of you were throwing in the towel with metals. So, I guess this correction is going exactly what it is designed to do.

But, even though this has meandered for longer than we normally see in these types of corrections, I think GLD is finally giving us a pattern to work with, and it is an ending diagonal.

If you look at the attached 60-minute GLD chart, it would seem that the c-wave of the [y] wave of wave ii is filling in as an ending diagonal.   And, it would also seem as though we may have completed wave 3 of the ending diagonal this morning, just a bit shy of the ideal 1.236 extension commonly seen for 3^rd waves in diagonals.  

Therefore, if we bounce correctively back up towards the 186 region over the coming days, and we are able to remain within the trend channel, then I would view that bounce as wave 4, with one more lower low to come, down into the 180-181 region.  This should finally complete this almost 3-month long 2^nd wave retracement, and have me looking for a strong reversal back up to the 192-197 region for wave [i] of the next rally phase.

Silver is not as clear as GLD, but it is also seemingly trying to complete an ending diagonal structure as well, also in a very complex 2^nd wave structure.  In truth, I think one more lower low towards the 21.60 region would really fill in this structure rather well.  But, on the upside, we would need to see an impulsive move through the resistance region noted between 23.15-23.50 to suggest that wave [i] of the next bull phase has begun.  And, that wave [i] will likely take us north of 25.

GDX is probably the least clear during this last corrective structure.   While it certainly could have bottomed in the blue wave [2], a drop below 25.50 would re-set the count, and consider it the bottoming in a much more protracted and complex wave 2.  And, the NEM seems to allow for such potential.   

While we are getting that push lower that I told you to expect, when I zoom in on the very micro structure, it looks like we are now completing the 3^rd wave in the 5^th wave of wave 5 of c of [b].  That means that we can still see that last 4-5 that I mentioned earlier.   However, should we see an impulsive rally through 34, that is our initial signal that a low has finally been struck.    But, until NEM actually finds a bottom over the coming days, I think it can hold back GDX from anything bullish just yet.

The one thing I want you to notice is the significant positive divergence that has developed on the daily MACD on NEM.  In fact, it is almost a year long divergence, which is simply building power for the next rally.  If you look back to the six months of divergence in the last half of 2021, you will see what happened when the market finally turned up in early 2022.  And, I am actually expecting something similar or even stronger to begin to take hold in 2024.

I know this corrective structure has been difficult for many of you.  But, in truth, unless you have the patience of Job, the metals complex really is not for you.  Remember, the reason these corrections take so long  - longer than most other complexes -is because the bullish runs are just so dang fast and furious.  Yet, overall, nothing has changed my expectations for a very bullish 2024 in the metals complex.  And, with NEM finally in the last throes of a final 5^th wave, it should not be too much longer before we begin to see fireworks to the upside.