When I zoom out on all the larger degree charts, it is quite clear to me that the reasonable probabilities side with a large rally likely to be seen in metals as we look towards 2023. But, the question has been how this decline completes.
The issue we have been having with the last segment of this decline is that it has been overlapping and likely tracing out as an ending diagonal. But, with the overlapping structures in 3-waves each not really providing us with a solid completion point, and without a 5-wave rally off the low, it does not lend itself to a high probability view that the bottom is indeed in place.
As we await more market action, the only view I can maintain for a bottom to be in place is that we are developing a leading diagonal off the low. But, as many of you know, leading diagonals are not terribly strong trading cues for me. I need a bit more evidence before I am willing to turn aggressive in the complex.
But, even to begin, we would need a higher high over the one struck a little over a week ago. So, that is what I am seeking over the coming week or two. If that is not seen, then it clearly means the ending diagonal to complete this decline has not yet completed, and the market is going to take one more stab to the downside before the bull market can finally return.
Again, I know it has been a very difficult 2+ years in waiting for this correction to complete. But, we really should be in the final stages of this bottoming structure and the bull market will “likely” resume in metals as we look into 2023.