Nothing CLEARLY Bullish Yet In The Smaller Degree Metals Structures
By
Avi Gilburt
Well, we certainly got the downside follow through we expected. But, it seems as though GDX and GC have come up a bit short of their ideal targets. Yet, I cannot say that I have any solid evidence that a bottom has yet been struck.
Both silver and GC seem to have been struck in an overlapping mess-o-waves during this last segment of their respective corrections. And, I have to assume that they are involved in some kind of ending diagonal structures. However, the manner in which to count those micro structures is not terribly clear to me at this time.
Normally, c-waves provide us with solid 5-wave structures, which adhere to Fibonacci Pinball norms. But, when we see something like an ending diagonal, it does make our job of pinpointing a bottom much more difficult. So, at this time, I cannot say that I can confidently start that either of those charts have bottomed.
But, I will also note that the positive divergence set up that we love to see from our 144-minute MACD on the silver chart is screaming “bottoming.” So, while I think there could be one more lower low sitting out there in the near future, I want to note that we are likely bottoming out on this pullback.
In GDX, I think the most reasonable view is that the rally today is a wave 4 in its c-wave. As with both silver and GC, I simply do not have a clear 5-wave rally structure off yesterday’s low to suggest that we have already bottomed. So, I am maintaining an expectation of one more lower low, at least for GDX.
Another point I made about GDX in the live video today is that this pullback is really small and shallow if it is going to be all of wave ii. So, I have added a label of this being just the a-wave of wave ii as my alternative count. Again, for this just an alternative count, and will be much more likely if the next rally to 36-37 is clearly corrective in nature.
So, while the micro structures are now wholly clear at this time, I have to say that I think we are bottoming now in this pullback. And, I am now on the lookout for a 5-wave rally to begin at any point in time to provide us with an initial confirmation that a bottom has indeed been struck, and to begin to prepare for the next major rally phase I expect in the metals.
