Oh So Close - Market Analysis for Dec 11th, 2019

As I have been tracking silver quite closely this week, I highlighted the turn up in the MACD on the 144-minute chart yesterday and told you to be on the lookout for a potentially shortened bottoming.  That may be playing out as we speak.

Since the market has now suggested that a standard impulsive downside structure is not likely going to be seen for this 5th wave, remaining below 17.08 still leaves potential for one more drop to be seen as an ending diagonal.  However, should that develop, then it is nothing I would suggest you trying to short since the market will likely reverse quite strongly once that ending diagonal completes. 

Moreover, since I don’t have the confidence that we have a completed 5th wave without a full 5-wave impulsive decline having completed for this 5th wave, it will take an impulsive move through the top of wave 4  (17.35 region) to allow me to fully accept the bottom as being in from a higher probability perspective. 

When I look across the complex, there are quite a number of mining stocks which are looking really good and following through in their rise off their recent bottoms.  Yet, there are some that are still quite sluggish.  And, I think the GDX is still being torn between the two.  Ideally, I would like to count this move up in the GDX as shown on the attached 8-minute chart, which presents as a micro 1-2, (i)-(ii) off the recent low. That provides us with a micro pivot of 27.90-28.20.  We would need to see the market break out over 28.20, without breaking back below 27.90 to maintain pressure up in a 5 wave structure off the recent lows, which would ideally point us to the 31-32 region, depending upon how extended the move up takes us.

As far as GLD is concerned, we still have not cleared the 139.70 resistance, as this can also be an ending diagonal for a 5th wave, as presented as a possibility in silver.

And, lastly, GDXJ still needs to take out its wave (iii) high for me to even consider the potential of a leading diagonal off the recent lows.  Until that happens, the yellow count remains “alive.”

So, while we have maintained an expectation of “bottoming” in the complex as a whole, there still is a bit more work to be done before this bottom is actually confirmed.  Overall, I am going to maintain the same perspective I have professing for the last several weeks – prepare for a major move to the upside.

GDX-8min
GDX-8min
GDXdaily
GDXdaily
GDXJ
GDXJ
GLD 8min
GLD 8min
GLDdaily
GLDdaily
silver-5min
silver-5min
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.