Sideways seems to be the way the metals like to move over the last 3 years. And, it has become quite maddening. But, they often say that the bigger the basing, the stronger the rally. So, when we finally do break out, it would suggest that the market will be moving fast and furious to our targets overhead, as can be seen most clearly in the daily GLD chart I have attached.
To that end, I think the smaller degree structure is best represented this weekend by the 8-minute GLD chart I have attached. You see, as long as the market holds this a-b-c corrective pullback structure in GLD, it is priming itself for its next rally. However, should we see the market break this support and follow through below 119.50, that opens that door for the 113-115 region deeper pullback we have been considering on our charts in the yellow alternative. And, since I have discussed that yellow alternative ad nauseum in many prior weekend updates, I will let you look back to see that analysis rather than bore you again with it here.
While GDX is still holding over its 19.50-19.80 support below us, we still have not seen the break out to the upside through the 21.80 region I had wanted to see to signal that this has turned up towards the wave v of 1 target. Clearly, this is concerning me.
Moreover, silver’s inability to rally off its support is also a concern. We have been struggling in the same region for weeks now, despite the market holding its positive divergence on the 144 minute MACD. Something is going to give, and it should be quite imminent. I do not think we can retain this posture for much longer. My preference remains higher for now, but should we see GLD break its noted support, it is likely silver will do so as well.
So, in the upcoming week, please stay on your toes. And, also please continue to focus on the opportunity the market is presenting to you (as I discussed last weekend), as I still expect a major rally to take hold as we look towards 2020.
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