GLD Looking Nice - For Now
By
Avi Gilburt
I know the title of this update is that the GLD is looking nice now, and it is, but silver and GDX are still quite sloppy at this time.
In GLD, this is really easy. As long as we hold over the 164 prior resistance, which is now support, especially since it is also the .618 extension in the micro 1-2 upside structure, then I am looking to continue this rally towards the 174 region. However, if we break below the 164 support, then we may have a b-wave rally that has topped, and a c-wave down can still complete a larger wave [ii], shown in yellow.
This brings me to the GDX, which has a much more messy structure and upon which I have been harping since we began the rally off the recent lows. The structure is not cleanly impulsive to the upside, especially based upon our Fibonacci Pinball methodology. This has kept me quite skeptical of this rally, at least until the market is able to fill in the bigger 1-2 structure in green. Ideally, we should hold over the 32.70 region and continue higher towards the 36.50-37 in the coming days to continue to complete this wave 1 up. But, that would only likely complete wave [iii] of that wave 1, so there is still a lot for this chart to prove before I am willing to play the upside in an aggressive fashion.
Silver has been having quite a bit of difficulty with the market pivot I provided to you almost two months ago. And, until it can resoundingly break out over that pivot, and follow through over 18.50, I am still questioning whether wave ii is done. Support is clearly the last spike low, with the 16-16.40 region of support below that. As long as we hold that support, I am still maintaining a bullish wave count. A break down below that support would open the door to the potential of a low below that struck in March, but that is not my expectation at this time.
So, while GLD has been acting rather well, I think the next few days are going to tell us a lot about the micro structures in the complex. At this time, I am not comfortable being aggressively long in GDX, and still retain my hedge protection in place . . . at least until it can complete the 1-2 upside structure.
