Messy Metals - Market Analysis on Nov 8th, 2017

While I strive to provide deep insight into the markets I track for you, I am somewhat at a loss in this region with the metals, especially with the various charts presenting quite differently. 

For those that have followed me for years, you know when I am bullish and you know when I am bearish.  And, for the great majority of the time, my bullishness and bearishness have been appropriate to prepare for impending price action.  However, we are now in a region of uncertainty, and I don’t think I can classify it any better than that at this point in time.

In starting with silver, we had a wonderful i-ii set up in the (c) wave of the b-wave higher, as I had been presenting over the last week.  However, the action we have seen this week has stalled and overlapped enough to make this potential much more cloudy now.  While we may still move higher within an ending diagonal, the overall structure has become much more messy.  And, as long as we remain over 16.30, I can still maintain this count, even if we see a more protracted (b) wave.

As far as the GDX, it CAN present as a 5 wave move up off last week’s lows.  But, again, it is not in standard accordance with Fibonacci Pinball, as there is no clearly defined 2nd wave, and the 4th wave pulled back much deeper than standard 4th waves.  So, that makes me question the GDX rally as well.

With regard to the GLD, to be honest, there is no clear “impulsive” structure I can discern, which makes me question whether it wants another lower low, or even potentially to break down.  Remember, my preference was to see a much larger degree b-wave rally, but I see no clearly defined set up for that to take hold just yet.  So, again, this leaves me quite concerned about the potential for upside follow through.

Moreover, I want to reiterate my perspective that any rally we see will “likely” be corrective in nature.  This is in line with the fact that I do not have a clear set up across the metals complex that suggests the metals are in a position to imminently break out.  While there are some miner stocks that really do look good, there are others like the ABX which still have more work to do in their downtrends before this pullback has completed.

This now brings me to the ABX.  As you can see from the chart, it looks like we are coming towards the end of wave iii of (c). While it looks like we still need a micro 5th wave within the 5th wave of wave iii, I think we should be seeing a wave iv rally beginning over the next week or so.  And, as long as we remain below 15.15, pressure will remain down until we complete this pullback.  So, based upon one of the major component of the GDX, it does support my expectation that this market is not yet ripe for a major break out yet, and we are still probably several months away until we are.

The biggest question with which I am still struggling is if the GDX can still see that bigger decline down to the 17 region or not.  And, as I noted this past weekend, we may have signs that we may not see a break down below the 21 region.  But, as long as we remain below the 24 region, the immediate pressure will remain to the downside, and a break of the 21 region opens the door to that drop to the 17 region.  However, an impulsive rally through the 24 region can set us up in the yellow count, which would set up the next potential 3rd wave break out early next year.

For now, I still remain quite cautious, and view any rally as corrective in nature, especially as long as the GDX remains below the 24 region

GDXdaily
GDXdaily
GLDdaily
GLDdaily
silver144min
silver144min
ABXdaily
ABXdaily
Avi Gilburt is founder of ElliottWaveTrader.net.