Metals Are Certainly A Mixed Bag

With silver dropping below the impulsive pattern set up, it is even just barely holding on to the leading diagonal set up.  And, a break down below 16.43 would invalidate that potential, as presented on the chart.  That would open the door to a retest of the 15.85 region in a more expanded second wave, as shown in yellow.

Moreover, GLD is holding over its upper support, but it is also below its micro resistance between 125.50-126.50, as you can see from the attached 8-minute chart.  I guess you can say it is caught between a rock and a hard place.  While we can count this pullback as an a-b-c corrective pullback so far, I think we are going to need to see an impulsive move through 126.50 before we can get a bit more excited in the near term.  Remaining below resistance can certainly see follow through down towards the 120-122 region, as I have outlined many times before.  But, at least we have been able to lower resistance, as the market moves through its pattern.

When I look at the GDX, I have to admit that it is truly a mess.  While I can certainly view this as part of a leading diagonal which still needs another higher high to complete wave (1), the micro structure is not making me terribly confident that we are going to head up one more time to complete it. And, clearly, should I see a sustained break below 21.20, it opens that door up again for a test of the 20 region.  Unfortunately, there is not a lot of clarity to be had in the micro structure we are seeing right now.

But, I do have to say that ABX seems to be doing what it needs to do so far to continue to prove evidence of bottoming.  While it can still continue up a bit higher before it completes wave (i), we do have enough waves in place now to consider it complete.  But, that means that we will likely see a wave (ii) pullback in the coming week or two.  That normally does not bode well for GDX being able to hold its support, but it is certainly possible that if they both continue a bit higher before completing their respective 1st waves here, they can both enter into a 2nd wave pullback together.

GLD 8min
GLD 8min
GLDdaily
GLDdaily
GDXdaily
GDXdaily
silver144min
silver144min
ABXdaily
ABXdaily
Avi Gilburt is founder of ElliottWaveTrader.net.