Despite the metals looking and feeling bullish, I simply do not have a reasonably impulsive structure to follow to the upside. In fact, both GDX and silver exhibit downside potential structures still. And, GDX would have to take out Novembers high to invalidate that.
Look folks. Anyone that has followed me through the years knows that I am not a perma-bull or bear when it comes to metals. I simply do what the market tells me. For example, in September of 2011, I went from being bullish to bearish. And, then in the fall of 2015, I again turned bullish. So, for me, it is not about anything but what the market tells me.
At this time, I still cannot find a strong impulsive wave count upon which to rely which would make me confident that the next larger degree rally has indeed begun. While it is certainly possible that it has begun, I just do not have anything to which I can confidently point.
In the meantime, I am still net long in the complex, but I now own some protective puts in GDX (with stops at the November highs), and some GLD protective puts as well.
In silver, it also has a potential bearish structure, which looks better than the potential bullish structure at this time.
So, if you ask me, I will tell you that I so want to be bullish this complex because we have had a year and half consolidation, and I have targets still much higher. But, I just do not have anything upon which I can heavily rely which tells me we have begun that major rally. So, for now, I still own all my long positions, and am just trying one more time to hedge those longs – especially for as long as GDX remains below the November high. If that changes, then my cautious outlook may as well.