I remember playing a game which I was a child called 7-up. But, it seems that as I got older, I began to follow a game with 2 less on the upside . . . which we call 5-up. (smile)
But, the point is that after a correction runs its course, we then look for an initial 5-wave rally off a low. And, we potentially have it at this time in the metals complex.
Yet, it may not be that simple. Let me explain.
The low struck in the GDX would have to be considered a truncated 5th wave, as I show it on my 8-minute GDX chart. And, it is hard to rely upon truncated 5th waves since it can be interpreted as part of the rally off the prior low, which could mean that the initial move off the low is really a 3-wave structure with a 5-wave c-wave of that a-b-c rally off the prior low.
For this reason, I seek confirmation. Such confirmation comes in seeing the next decline as a corrective 2nd wave pullback, with a follow through thereafter over the high of wave [i] which will provide us with a strong indication that the market is rallying in wave [iii] of wave if of  of 3 in the GDX.
Therefore, after now completing what seems to be 5-waves off a truncated low in GDX, I am now expecting a retracement. Once we confirm that the high for this rally is in place over the coming day or so, I will put out a retracement support region in GDX, silver and GLD, as I am still unsure if this rally has yet completed as I write this update.
But, the reason I am writing this update early is because the market is allowing you an opportunity to hedge your positions for the possibility of a lower low still to come if this rally was indeed a corrective rally.
Remember that we did not have a clear positive divergence at the lows in the GDX and GLD charts. Therefore, I still have some question in the back of my mind if this is a bigger 4th wave bounce before the final low does get struck. Again, this is another reason I am not completely sold on this rally just yet. I still seek proof as outlined above.
So, overall, we can now count a nice 5-wave rally in the metals complex off the recent lows. But, we still need confirmation after a corrective retrace, followed by a rally over the high we strike once this rally makes it clear that it has topped out.
Lastly, I want to also highlight a potential inverted heads and shoulders pattern that can be created by this [i][ii] potential structure in GDX, as highlighted by the ellipses presented on my 8-minute chart.
So, in summary, we have an initial indication that this correction has completed, and I am seeking confirmation over the coming week. But, I am going to be somewhat protective for a possible lower low, as I am now dealing with house money after cashing in a lot of hedges over the last several months.