Layering In As We Speak

With the metals approaching our initial target zones to mark the end of this correction which began in January, I have personally now deployed approximately 50% of the capital I have designated for buying mining stocks.   And, if I may remind you, our MMA analysts have put out a buying list of individual mining stocks earlier this week.  

So, let’s look at each of the charts individually.  

Starting with silver, as I have said, I am going to leave the count I have noted on the 144-minute chart, which points to this only completing the wave 3 in the final 5-wave structure within this c-wave.  That means my primary analysis expects another 4-5 before this completes.  But, I must warn you that I would not be surprised if this decline completes the correction.  And, that is why I have already been busy buying individual silver mining stocks.

Moreover, we are now approaching my ideal target that I set many months ago in the 53.50 region for silver.   Of course, silver can (as it has done before) exceed the ideal target and even drop as low as the 40 region.   But, if we do break down below 53.50, I would only view that as a bigger opportunity to add further positions, which is why I am leaving dry power available to buy.  And, if we instead mark the lows in the 53.50 region, then I would deploy the remaining cash during a 2^nd wave pullback once the next major rally begins in the individual silver mining stocks.

As far as gold is concerned, we are now approaching my ideal target for that as well, which is in the 1.618-1.764 extensions in the 3840-3905 region.  

Please also note the positive divergent bottoming structure that is developing with the respective MACD’s in the 60-minute gold and 144-minute silver charts.  If we see these MACD’s begin to turn up and turn positive in the coming days, I will likely use that as another signal to add additional positions in the complex.

In GDX, I am leaving my primary count as this only being the (a) wave of wave 5.  But, as I noted regarding the other charts, we are approaching the 71 region in GDX, which is our initial target.  So, if the next rally begins with a clearly impulsive rally, then I may have to view us as having completed this decline a bit short of the ideal target.   But, for now, I am maintaining a primary analysis that we will see a corrective (b) wave retrace, ultimately leading to another decline which will take us down to the 64-71 region, which is why I am leavening dry powder available to buy at that lower target region as we complete a 5-wave (c) wave.

Also, take note of the positive divergent set up on the daily GDX chart as well.  And, should this turn back up, then it is further confirmation of a bottoming process in progress, if not the bottom having been struck completely.

So, after a 6-month correction and going to a full cash position as we were rallying into the January high, I am personally now focused on moving back into the market with acquisitions of individual mining stocks. Should silver and gold both provide us with a CLEAR 5-wave rally off the lows, then I may consider adding some GLD and SLV positions – and potentially even options positions – as it would make it more likely that they can rally to new highs as well.  Until that time, I am continuing to focus my purchasing on the individual mining stocks which could very well outperform both silver and gold on the next rally.