Metals: Pre-Weekend Update

With the continued strength in the metals complex, it has to make us strongly consider that the bottom is already in place.  So, let's discuss it.

With the GDX continuing its rally, it seems to have come too high to be a b-wave, but an alternative view can be that this is a 4th wave in a bigger ending diagonal.  I think that is a bit less likely with the size of this move, but it is certainly reasonable.  I would say that I am now leaning towards the bottom being in for GDX.

Yet, there is still a reasonable probability that we can head to a lower low. I have added the wave count on the 8-minute GDX chart in this update. In our live video, I was debating whether this is 5 waves up or 3, since we have exceeded the 87 region.  But, if you remember, I said we had to get to that point with 5 waves up.  Yet, the best count suggests this is only 3.  And, that is why I can still maintain a 4th wave alternative count.  

So, it would suggest it is reasonable to expect a pullback, at least in a wave (iv).  So, this morning, I posted the following:

"This would be a good time to consider some protection for your longs in the metals complex if a lower low would affect you mentally.":

In silver, we have come up into resistance, but I still cannot be confident that a bottom has indeed been struck.  So, I am still 50/50 on silver.

In gold, while we have spiked the 4400 resistance, if we were to see a reversal soon, then it still could be a 4th wave, so I am not as yet convinced in gold either.  But, it is certainly trying to make a believer out of me.

All in all, I am going to assume the next few weeks will likely tell us the story as to whether we have a strong bottom in place for all the products.  But, for now, the mining stocks have gotten me to lean to the bottom being in place already.  But, ideally, I still want to see the (iv)(v) to make me a true believer.