Metals Continue To Push Higher

Whereas the GLD and silver charts are still pushing higher towards their ideal targets, I have to be honest in explaining that I am questioning the GDX move at this time.

In very simple terms, GLD continues to fill in the micro chart we have been tracing for weeks now.  There have been no real surprises, as we are now approaching the completion of the micro wave 3 on the attached 60-minute chart.  So, there really is nothing more for me to add to the analysis in that regard.

In silver, if this rally is wave [i] of wave iii of [3], then we should be getting closer to the next market pivot overhead.  And, as long as that resistance is respected, I am expecting a pullback in at least a wave [ii] of iii, with the alternative count being a more expanded wave ii pullback in yellow.  So, as before, nothing has really changed in this chart.  However, if silver is able to move through the next micro pivot sooner rather than later, then it would suggest we are already in the heart of wave iii of (3).  But, that is not my expectation at this point in time, even though I do think we can test the next micro pivot resistance.

However, the strength in the GDX is making me question the wave degree with which we are dealing.  While I have been eagerly awaiting for a rally set up pointing us up over the 40 region in the GDX, the move off the early June low was extremely overlapping and did not allow me to maintain an immediate bullish perspective as the structure looked very corrective off those lows.  This is why I genuinely despise leading diagonals because they look so much like corrective waves that one cannot necessarily trust them from a trading standpoint unless they are confirmed by other factors. 

So, if this is indeed a leading diagonal for wave if of wave [5] of 3 in green, we should remain below the 40 region, and see a rather deep retracement for wave ii.  That has been my primary count for the better part of the last two weeks, and we are now in the region in which wave i should be topping. 

However, if the market strength is going to continue towards the 42 region before we see a break down below 37, then it opens the door to the alternative I have now placed on the chart, which suggests that this is still wave [3] of 3, as shown in yellow.  Either scenario would still suggest a deeper pullback still to be seen before we rally up towards the 47+ region in the coming months.

GDX-8min
GDX-8min
GDXdaily
GDXdaily
GLD60min
GLD60min
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.