Holding Their Cards Close To The Vest
By
Avi Gilburt
Can I provide you with a continuation set up in the metals? Yes. Can I provide you an upside break out scenario in metals? Yes. The problem is that neither is what I would consider high probability right now. So, unfortunately, the metals are not tipping their hand at this time. Therefore, for now, I will remain holding my protective puts until the upside becomes more clear and higher probability.
First, I cannot say that silver or GDX is providing us with what I would call a CLEAR 5-wave decline which would suggest the yellow count is playing out. Second, while there is some micro potential that a low has been struck yesterday, the move up is still not large enough of a degree to rely upon. So, as I noted in the first paragraph, there still is nothing upon which we can sink our teeth from a probabilistic sense.
As far as GLD as concerned, it is still holding over the 264 region, and can still continue higher in the blue count. A break down below 264 would be an initial signal that a b-wave or the yellow count is in progress. But, remember that neither have to be impulsive, as both patterns represent a-b-c pullbacks. So, GLD will not be providing us any strong clues as to the depth of any potential break down, as I have outlined recently.
In looking at the 8-minute chart on silver, there is some potential that it has bottomed in a wave 2, and has begun a wave i of 3. But, until we actually see all 5 waves completed in wave i, there is really nothing upon which I can strongly rely. But, simply note that the potential is there.
I have also added a similar potential in GDX. But, again, we only have a 3 wave rally so there is nothing which is reliably tradeable to the upside at this time.
Yet, in GLD, I really do not even have a clear bullish set up off the recent low, so it really is not showing the potential that may be seen at this time in silver or GDX.
So, in summary, I still have no reason to go aggressively long nor do I have a reason to drop my protective puts. Unfortunately, we are somewhat stuck in the middle. Should something become a bit clearer, I will certainly post it in the room.
