Next Drop In Metals Will Likely Be Last Buying Opportunity Before Melt-up


I do mean what I say in the title of the update.  But, the question still remains what that drop will represent?

GDX has been quite strong of late, and we can now consider ourselves as completing 5 waves up off the recent low.  Whether that is the blue or green counts on the daily chart is still open for debate.  What is not open for much debate is that after the next pullback is seen, and we then rally over whatever high we create on this current rally, that should have us squarely in the melt-up scenario in GDX.

The reason I still have some question as to whether we can still see a c-wave down is that NEM still has a slightly better count wherein a c-wave down can be expected.  Moreover, the fact that both silver and gold have yet to complete their 5th waves off the recent lows also tells me to still be a bit cautious for a little while longer.  So, I am leaving the yellow count on the chart on GDX for now.

While I mentioned that I had taken some lotto-puts as we were topping the other day in GDX, I got stopped out on those when we took out the recent high.   I am still considering one more attempt at some lotto-type puts just in case the NEM does push us a bit lower than a standard wave [2].  And, much will really depend on the nature of the next decline.  If we are clearly corrective, then it bolsters the more immediately bullish wave [2] potential and we will need to prepare for the break out in the heart of the 3rd wave sooner rather than later.  However, if the initial move down is clearly a 5-wave event, then I am going to expect another decline back down towards the 32/33 region again to complete a more protracted larger 2nd wave structure.

In the meantime, both gold and silver are still well below their ideal targets for 5 waves up, and have not even been able to exceed their recent highs on this rally.  This is still a bit of a warning and telling me not to get too bullish too soon.

But, either way, it is reasonable to expect another pullback before the fireworks begin in silver and the mining stocks.  The question now is how deep?  And, as it stands right now, different charts are presenting differing potentials.  

Yet, I strongly urge each and every one of you to recognize that the potential for a strong and broad rally in the metals complex is quite high once the next decline completes.  So, if you have not filled your standard positioning in the complex just yet, the next decline may be your last opportunity before a break out and melt-up is seen. Please stay focused on the bigger picture.

The next week or so will tell us if we get that c-wave down in the complex, or if we are indeed only going to get a more shallow corrective pullback, and will need to prepare for the next break out phase sooner rather than later.

GC8min
GC8min
GDX8min
GDX8min
silver-8min
silver-8min
NEM
NEM
silver-144min
silver-144min
Avi Gilburt is founder of ElliottWaveTrader.net.


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