Just Beyond Frustrating - Market Analysis for Dec 30th, 2020
By
Avi Gilburt
At this point, I echo the “sentiment” of many of you in that the metals have been an extremely frustrating complex of late.
We have had a nice multi-month pullback, which by most standards would normally be enough to complete a larger degree pullback as we have been tracking. Yet, my main sticking points have been the lack of a completed downside structure, as well as the lack of the positive divergences we normally see at the bottom of a correction on the daily GLD and GDX charts.
So, I have been trying to allow the market to prove to me that it has indeed bottomed by giving us a solid 5-wave structure off the lows, and then breaking out over the micro pivots without breaking back below those pivots. Yet, the market has refused to so just yet.
Unfortunately, with all the sideways and grinding action, I still have not been provided the clarity which I seek from the price action. To be honest, the structure in the GDX is a bit messy to be confident that we are breaking out in wave [iii] of wave i of [5] of 3. So, from my own personal perspective, as long as were remain below the pivot, I will maintain some protection in case we break down to the next lower target for a bottoming in the 31/32 region. However, if the market breaks out over the micro pivot in the GDX, I will stop out of most of my hedges, and only re-hedge in the event we break back below the pivot thereafter.
And, since GLD has not broken out over its micro pivot yet either, it also has not provided the necessary proof I need to confidently view the lows has having been struck.
Silver still looks best out of the 3 and as long as we remain over 24.25-24.75 support, I am still looking higher to our target overhead.
So, while the market has had the opportunity to prove to us that the lows have indeed been struck – despite the two issues I have outlined above and in many prior updates – we still have no confirmation just yet.
