Impatience Reigns In The Metals World
By
Avi Gilburt
Even though we have seen some tremendous gains in the metals and miners complex, many are still very impatient when it comes to further gains. But, please try to remember that even during a 3rd wave, the market does consolidate before it continues on its climb. That is how I am viewing many charts.
To that end, I still have no way of viewing the miners complex as bearish as long as GOLD and NEM continue to consolidate in a very bullish structure. And, unless we see these two charts break back down below their recent break out points, I will continue to maintain a bullish bias.
Moreover, within the micro GDX structure, we are now tracking a bullish 1-2 set up, which points us to the next target region in the 40-43 region. As you can see on the attached 8-minute GDX chart, we have a clearly completed 5-wave rally off last week’s corrective pullback low. And, today, we began what counts best as a wave 2.
In simple terms, as long as the GDX holds over the 32 support region, I am viewing this chart bullishly, and targeting the 40-43 region next. It would take a break down below 32 for me to even consider any near term bearishness. But, as long as we are over 32, I think you have to view this with bullish glasses. The next time we rally over yesterday’s high will likely trigger wave 3 taking us to 40-43 over the coming weeks. For those that want a “safer” entry, you can allow the market to break back over the top of wave 1, and when that happens, we can determine where the stop is based upon the structure at that point.
As far as GLD is concerned, I just don’t have a clear micro structure upon which I can rely. The drop off the b-wave high has been quite overlapping which does not give me a lot of confidence to identify a strong target. But, the a=c is in the 156 region. The next time we break out over the top of the b-wave high will also signal that the next rally in GLD is underway.
Silver presents the same way as GLD, but with much greater upside potential, since it has to catch up to the rest of the complex. So, the next time we see an impulsive move through the b-wave high at 15.92, I think we will see a very strong rally take hold in silver.
So, for now, I think we need just a bit more patience, as it seems that the GDX may provide us with a wonderful opportunity on the long side over the coming days.
