I wish I can say that the metals are certainly breaking out at this time. However, they have been playing out as we mostly have expected now for quite some time, and I still have not seen anything that is strongly suggesting they will deviate from the prior expectations.
Over the weekend, I noted my primary expectation:
Now, we are at an inflection point. The market is going to have to make a decision in the coming week. My primary perspective has been that, once this rally completes, we see a sharp decline in the complex, to scare out investors one more time, making them believe this is yet another fake out, especially when you consider that all eyes are on a supposed break out of a downtrend line in silver.
As far as the GLD is concerned, it clearly pushed through the 122 resistance I noted last weekend, however, it has not done so with much volume. One of the things we often see within 3rd waves is much stronger buying volume. It is one of the signs of a 3rd wave, which we have not seen just yet in GLD. Moreover, my expectation was that this would be an expanded b-wave high, which is supported, thus far, by the negatively diverging techncials on the attached 8-minute chart. Now, while GLD has exceeded its initial resistance a bit (and what else is new with GLD), it still has not shown any indication that this break out is real. Therefore, I maintain the same expectation in GLD that I do for silver, and will be looking for one more drop before the fireworks begin.
But, remember. When dealing with fireworks, all it takes is one spark, and the entire box can be ignited. The metals market is in no different position right now. It does have the potential for a direct break out, and if we should see silver take out its blue box overhead with strong buying volume, do not stand in its way, since it means someone has lit the match, and it will likely have begun the heart of its 3rd wave higher.
As far as GDX is concerned, as I have been saying for the last several weeks, the micro structure is truly messy on this rise. While GLD and silver have been displaying truly ideal Elliott Wave structures, GDX has been an overlapping mess. So, the question of how to count the micro structure has become a bit of a challenge. Rather than provide you with multiple count potentials, I am going to provide resistance and support levels. Currently, the resistance for GDX resides between 23.60-23.96. As long as we remain below that resistance region, I am expecting another pullback in the complex. However, should we see a direct break out of that region, then you should set your stops just below the 22.83 region, for if it is a true 3rd wave break out from that point, we should not see the 22.80 region again.
In summary, I remain bullish the complex, but am on alert for one more pullback before the market finally breaks out for a rally into the fall of 2017.
While silver is again posturing to challenge the resistance box, my primary expectation is that this is only a b-wave bounce in wave (2). And, in GLD, I have modified the action to a w-x-y complex correction, with an expanded x-wave, which would match the overall pattern direction in silver and GDX.
So, again, as long the all these charts remain within their resistance regions noted, I am still looking for one more drop to complete this consolidation. However, if a match it lit, and the fireworks start jumping out of their resistance boxes, do not stand in their way.