I am going to start this update with my conclusion: I am still awaiting the silver and GDXJ break out, and am going to maintain a bit more patience until they do.
So, now that I gave away the punchline, I have to say that the structures we are still seeing in the metals complex remain quite constructive to higher levels to be seen in the coming weeks and months.
As we began the pullback I was looking for in silver this past week, I modified my count to the alternative presented over the weekend right before the market actually confirmed that move down. Most specifically, I am still viewing this action as a series of 1’s and 2’s, as you can see from the attached chart, which has certainly traced out a nice inverted heads and shoulders pattern on the silver chart as well. So, I still await a break out through the pivot to suggest that the heart of a 3rd wave has finally begun in silver.
I want to note that due to the contract roll on the futures, the market pivot was adjusted to the 19.17 level being the break out point now.
In GDXJ, I await a similar break out over the 48 region. And, as I said before, as long as we remain over the 38 region, I have to take an immediate bullish perspective on this chart, with a break out over 48 pointing me to the 66-76 region next. As you can see from the GDXJ chart, the MACD has again dropped down to levels from which we have begun prior rallies, so stay alert for the next 5-wave rally structure potential.
Lastly, to keep it rather simple in GLD and GDX, as long as they remain over the 149 and 29 regions respectively, then I have to maintain an immediate bullish bias for a continuation rally.
So, as I noted in my last update, I still saw potential for one more consolidation which “should” take weeks rather than the months the last one took. And, as long as supports continue to be respected, the next move higher “should” begin the fireworks for which we have been waiting in GDXJ and silver, with GDX and GLD continuing their current rallies.
Alternatively, should supports break, then we will likely have to move into another multi-month consolidation phase.