Metals Are Pressing Resistance
By
Avi Gilburt
I wish there was more insight I was able to provide to you in the metals complex, but there really is nothing more I can add to what I have been saying.
As you can see from the silver chart, we are pressing against resistance, and if we are able to break out, we will need to still complete all 5 waves for wave (1) before we can begin to consider being bullish a bit more aggressively. However, we are still at price resistance, as well as resistance on the MACD, so it is time for silver to either break up or down. We are at the proverbial inflection point.
The same applies to GDX. While the pullback low “can” be all of wave (2), my expectation is that this rally is only a b-wave rally, leading to a c-wave drop. Yet, we are still below the downtrend channel on the daily chart, and the 22.50 resistance level. For this reason, I still hold the remaining hedges in my account and will only begin to reduce my hedges further should we break out, or drop towards the 18.35 region one more time. But, as long as we remain over 19.40, I can maintain a more immediate bullish bias as presented on the 8-minute chart. Yet, to be honest, I would prefer us holding over 20 I this set up.
As far as the GLD, while I can count this rally as a sloppy 5 waves off the lows, I never saw a positive divergent bottom being struck on the daily chart. While it is not necessary that this should occur, the great majority of bottoms are stuck with such indications, whereas only a minority of bottoms are stuck without it. So, I still have an eye towards the potential for that 5th wave lower in GLD. However, if silver and GDX both break out, then I can be a bit more confident that gold may have bottomed without any visible positive divergence on the daily chart.
I imagine that leaves me in a place of being cautiously optimistic in the bigger perspective, especially since any further drops in the complex will likely provide us with the appropriate divergence I wanted to see for a low to be struck in the GLD, and would likely complete this wave ii pullback, if it has not yet been struck already.
