Metals Still Need PROOF

With today’s whipsaw in the metals too, my expectation was that any rally seen in the GLD would likely only be a 4^th wave.  And, with the market spiking up to the target I laid out earlier, and then strongly reversing, it would seem that this is consistent with my expectations.

What that means is that we now have the minimum number of waves in place to complete a c-wave down in wave (ii).  The problem is that it seems to have come up short of the ideal target, wherein this c-wave would only be equal to .764 the size of the a-wave.  That leaves us with the potential that this c-wave may not yet be complete, and that todays low actually just marked the bottom to wave iii of the c-wave of (ii). 

Ultimately, it means that as long as we remain below 127.50, pressure will still remain down.  However, if GLD can begin to provide us with an impulsive move through 127.50, and then rally over last week’s high, it clearly would open the door to this wave (ii) having completed, which would only then place us on break-out watch.

As far as GDX, it is pretty much in the same position as the GLD.  But, when I look at the ABX a bit more closely, I have to note the potential of further whipsaw in the yellow count, which can take us back up towards the 14 region before the final decline may take hold. But, again, just as I have been suggesting that we take a larger perspective in GLD, I am still also suggesting the same in ABX.  Should we see an impulsive move through 14 in the ABX, it will open the door to it having finally found a long term bottom in this wave ii.  So, I would still suggest patience before you look to the long side in this complex aggressively.

As far as silver is concerned, while I could make out a micro 5 wave rally off the last low, micro structures in silver are not terribly reliable.  But, should we be able to break back out over today’s high before breaking below 16.35, I would be following the yellow count for a more extended 2^nd wave in this region.

Again, much of what we are seeing seems to be suggesting the final machinations of bottoming price structure across the board.  But, since metals often extend beyond standard expectations on both sides of the market, I am going to maintain patience before becoming uber-bullish just yet.  For now, pressure remains down, and the market is going to have to prove a more immediate bullish set up in the coming weeks, first by breaking over today’s high in impulsive fashion.  Again, below today’s high, pressure remains down.