Gold Is The Final Holdout

At the time of my writing this update, both GDX and silver have full counts to the downside to consider their respective 2^nd waves as completed.  Yet, neither has proven that as fact with an impulsive reversal to the upside.   But, it would not at all surprise me to see that imminently.

Yet, the fly in the ointment remains the gold chart. I still have no way to reasonably consider this decline as a completed 5-wave structure.  In fact, the current structure still suggests that we may be in a triangle for wave iv.  The other potential is that we have begun the 5^th wave lower low.   And, remember, the ideal target for that 5^th wave lower low is presented in the box on the 8-minute GC chart as between the 1.618=1.764 extensions of waves i-ii in what I am counting as an ending diagonal c-wave of this 2^nd wave.

What always makes me chuckle is that when the market was at the recent highs, and I was holding to my guns in looking for a 2^nd wave pullback, many of you were “praying” for a pullback.  Now that we are getting that pullback, I am hearing many losing “hope” in the complex.  Consider that our charts have not even struck the .618 retracements in their respective 2^nd waves yet, and many have already given up.

Well, I will tell you that I have not given up and have added to my positions.   This is the best set up I have seen in years in the metals, and I intend on capitalizing upon it.  But, it also means I am going to maintain appropriate risk management parameters when it comes to stops and position sizing.  

So, I am still expecting this complex to bottom out in the near term, as the structure and technicals all point to “bottoming.”  And, should we see a strong 5 wave rally off an appropriate low, then I will let you know that we can begin looking higher and setting up a “break out” in the heart of a 3^rd wave in the coming weeks.  For now, I am still going to track the potential for a lower low, especially in gold.