As I explained in the video update this morning, the bullish case in the metals is not dead yet. Rather, I would say it is on life support at this time.
You see, the current decline can still be a wave [ii] in silver as well as a wave ii in GLD, as both can still count as a rather reasonable a-b-c structure, yet much deeper than I would prefer to see.
However, I cannot say the same for the GDX. In fact, the GDX looks like a 5-wave decline off the high struck in May. While there is some potential for this still to count as an a-b-c pullback structure for the green wave ii, the a-wave in that potential would have to be quite miniscule, with the significantly larger portion of this decline being the c-wave. Again, this is still possible, but in no way can I proclaim this to be highly probable, at least based upon the manner in which these structures most often take shape.
I am still trying to be a bit more patient in order to see how the next rally takes shape. If the rally is CLEARLY an impulsive 5-wave structure adhering to Fibonacci Pinball, then I will have much greater evidence and support for the more immediate bullish resolution. However, if the market only provides us with a corrective rally in the coming weeks, then I will likely turn quite protective of my own portfolios.
Now, if the GDX or the GLD break below their March lows, then there will be no immediate bullish potential on these charts, and the likelihood of the larger degree 2nd waves becomes quite high. But, as long as we remain over those lows, the bulls have a very small hole within which they can thread this needle. But, as for me, I am not terribly enamored with this potential bullish set up after the action we experienced on Friday.
For now, there really is nothing more for me to suggest, as I would much prefer to see some sort of rally before I am able to make any decisions. But, again, should we break the March lows in GLD and/or GDX, then those alternative lower lows become a high probability.