Potential 5 Down - Market Analysis for May 7th, 2026

With GDX and gold both completing 5 waves up off the recent lows, we have two paths that the market can choose.  And, as I noted earlier this morning in an alert, we can clearly reduce the paths in GDX from three down to the final two.

So, to remind you, the question on the table is whether we drop to lower lows in a more direct fashion, or whether we have one more rally in the purple count before we begin that drop.  And, our answer is going to be determined regarding whether the market pulls back in a 5-wave structure or a corrective one.

Today, the market completed a 5-wave rally in both GDX and gold.  Either that rally is a (c) wave within a b-wave within a 5th wave down to lower lows or that 5-wave rally was wave 1 of the purple count going higher.  Today, I can present a strong argument for both GDX and gold as seeing a 5-wave decline.  But, I must remind you that a-waves can sometimes be 5-wave structures, but that does not happen terribly often.

The fact that we had 5 waves down as either an a-wave in a wave 2 pullback or wave i of a bigger wave 1 in the c-wave immediate decline to lower lows still leaves the door open for both paths at this time.  It is now reasonable to expect some form of bounce, and as long as it is corrective, we are expecting another decline.  If that next decline does not complete a larger 5-wave structure to the downside for wave 1 of the c-wave to immediate lower lows, then we will be moving into the purple count and those willing to trade more aggressively in the metals market can look for long trades to take.  Once we know where the purple wave 2 bottoms we can then set our targets within the purple b-wave boxes overhead.  

However, if we complete a larger degree 5-wave decline in the coming days, then we can choose to short a corrective bounce thereafter with the expectation to drop to the lower lows in a more immediate decline pattern.

This is our job over the coming several days.  And, it looks like we are getting much closer to clarity as to the appropriate path to lower lows. 

But, as I am sure you have recognized, I have left silver out.  I cannot come up with a reasonable count for 5-waves up off the recent lows for silver, which does have me leaning towards the more immediate lower lows path.  But, despite this, I would much rather seek confirmation from GDX and gold as they seem to be presenting a lot more clearly than silver at this time.