Nothing Goes Up Forever

This has indeed been a strong rally in gold these last few weeks.  And, whether the 4^th wave is done will likely be determined by the nature of the next pullback.  Until such time, I have strong doubts as to whether it has indeed completed.

As I mentioned several times before, the only way to consider it as completed is with a complex w-x-y pattern.  But, even so, the y-wave would have to be a triangle, which is a pattern I think I have seen only once in the last two decades.  So, needless to say, this is not something I am going to adopt without more proof.  Based upon this point alone, my preference remains the expanded b-wave structure, with a c-wave decline yet to come.

For this pattern, I am seeking a 5-wave decline for wave 1 of the c-wave.  And, if we do not see an impulsive decline for wave 1 down, then I will be forced to view the yellow count as the higher probability despite the rarity of the structure.

Silver is now in an interesting posture.  I have no immediate downside set up in place.  But, there is a potential upside set up in the micro-structure right now, which I am showing on the attached 8-minute chart.  The only thing that has me questioning this potential is the depth of the wave 2.  It is not common to see such a deep potential wave 2 pullback hold as support.  But, for now, it is worthwhile tracking.  We will need to see a strong move through the pivot, which will then become our support once we reach the 1.00 extension overhead.  The ultimate target for this 5-wave structure would be the 43.75+ region.  And, this would potentially complete wave 1 on the 144-minute chart.  However, should we see continuation through 44.50, then it will move towards the wave 3 potential noted on the 144-mintue chart.  In other words, as long as the market now remains over the wave 2 low in the 41.14 region, then we have an upside set up pointing us to 43.75+.  And, clearly, a break of 41.14 would invalidate this immediate potential.

GDX is still very much a question to me similar to GLD/GC.  It really did not provide us with anything resembling a 4^th wave of an appropriate degree, which means I must still maintain an expectation for it to be seen.   Moreover, I may be moving towards the view that this is an extension in wave 3, as it is truly pushing the bounds of a b-wave, even for a metals chart.  For now, that is a bit more of an academic call, but I will need to see the nature of the next decline similar to what I explained in gold.  

Overall, there is still some potential for more upside to be seen, especially in silver. But, I still view it as a high probability that a larger degree pullback of some sort will be seen in the coming weeks as I have no evidence suggesting that the market is in the final 5^th wave already.