Key Pullback In Metals

Across the market, we have what looks like a nice 5-wave structure off the recent lows.  And, we are now seeing a pullback off those highs.  So, of course, the question is if we have truly bottomed or if we have lower levels yet to be seen before this 4th wave finally completes?

As I mentioned on my live video this morning, the one sticking point that is still troubling me about being VERY confident that the bottom is in place is that the market did not provide us with a low accompanying a positive divergence on the daily GLD and GDX charts.  While in a minority of circumstances the market will bottom without that divergence, it still is something I have to consider within my analysis.

However, we still have a very nice 5-wave structure off the lows in GLD, GDX and silver.  And, if our 4th wave pullback has indeed completed, then the market will hold the support boxes noted on the smaller degree charts I have attached for silver, GDX and GLD. 

Now, since this structure is better viewed as a 1-2 off the recent lows, I am going to have to adjust our market pivot once we have a better indication that this 2nd wave pullback has completed and held support.

So, clearly, the next few days will likely provide us with that indication.   And, I will then update the various charts with their respective pivots so we can track the market with stronger assurance if the bottom has truly been struck, and utilize those pivots for appropriate stops should the market begin to turn up higher in the coming days.

Lastly, I will note that if the market were to see a lower low from here, it would be a strong buying opportunity since we would have developed that lower low on what I think will then be that positive divergent bottoming in the GLD and GDX daily chart.  But, for now, I think that is a lesser likely potential, at least as long as the smaller degree charts remain over support.

GDX8min
GDX8min
GDXdaily
GDXdaily
GLD 8min
GLD 8min
GLD60min
GLD60min
silver-5min
silver-5min
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.