Well, if you have been following my analysis of late, you would know that the rally off the recent lows in the metals, especially in silver and GDX, has been quite overlapping. Now, the rally structure can present as a leading diagonal off the lows, but you would also know that I do not have a lot of confidence in leading diagonals as trading cues.
Moreover, if you take apart the micro structure in silver, while the market did strike the 1.236 extension off the lows, it really did not provide us with a 5th wave striking the ideal target within a leading diagonal, as its possible 5th wave up barely made a higher high. This really leaves me with even less confidence in the potential leading diagonal in silver. Yet, the potential is still in place. And, if silver is able to rally over the high struck this past week, I may consider this as a 1-2 structure breaking out in a wave 3 within its wave [i] of wave v of . So, at this point in time, I may have to lean a bit towards the potential of a lower low, but I cannot say that the lower low is a high probability.
As far as GDX is concerned, I have the same issue with counting its rally as a leading diagonal for its wave [i] of I of  of 3. But, if we hold the 37.70 support, and rally back over this week’s high, I will be more inclined to view the potential of the leading diagonal wave [i], as shown in yellow. While we will have to rally through the 41 region to really convince me, but a move over this week’s high will go a long way to lowering the probabilities for the lower low in GDX.
As far as GLD is concerned, I would have to view it in the same way. Ideally, I would like to see us hold the 175 support and continue back over this week’s high to rally for wave 1 of v of [iii], as shown on the 60-minute chart. But, if we break 175, then we will likely see that dreaded lower low into the 168-172 region.
Overall, we have now been machinating within a 2+ month long pullback/consolidation in the metals complex, and I think we have either completed that pullback, or have one more bout of weakness before we complete that structure. And, to be honest, it is a mixed bag when I review the underlying miner charts, so my overall perspective presented above stands as it is – with the potential for a dreaded lower low, but it is certainly not written in stone. This correction is near completion, if it has not done so already.