Metals Testing Resistance Too
By
Avi Gilburt
With the bounce we have seen in metals this week, they all seem to be testing their respective resistance regions.
GDX right now is close to a potential invalidation point for the immediate decline path I have been tracking. But, close is not good enough. We need to see a 5-wave rally through the resistance of 84.80 with the 5-wave structure completing in the ellipse noted on the 8-minute chart to provide us with a potential wave (i) of wave i of (3). For now, we remain below resistance so that would still suggest a lower low.
Silver and gold are also both below their respective resistances, so there is not a lot for me to add at the moment.
So, I would like to take this opportunity to remind you of a few things.
First, I want to again remind you that bigger perspective primary count is expecting the next rally in silver and gold to be a big b-wave. And, since b-waves are corrective rallies, I maintain no expectation for a 5-wave rally off a low. That is why taking our resistances is going to be the primary support that we are in the b-wave rally. Of course, should we see a 5-wave rally off the low, then that would open the door to some of the other potential paths I have discussed in the past, including the potential for a 5th wave to much higher levels in the metals. But, for now, that is simply an alternative to which I am open, but it must be proven.
Second, there are many mining stocks that have a very nice 1-2 structure for which we seemingly are completing a nice 2nd wave at this time. This is no different than we have seen in the past. For example, there were many miners which bottomed in the last quarter of 2015. And, when GDX made a slightly lower low (about 40 cents) in January, the miners that were already in their 1-2 structures to the upside lead to the upside.
This time, there is potential that some of those mining stocks that would pull GDX to lower levels now may only see their rally as a corrective b-wave, similar to the way my primary expectation in silver and gold is presented right now.
So, the market is still vacillating between bottoming and needing lower levels before this decline is complete. But, overall, this is a bottoming structure and I expect we will begin the next major rally in the not too distant future.
Lastly, please remember that my upside target boxes are not meant for timing purposes but for targeting purposes.
