With the final squiggles filling in for the 5th wave off the December 2017 lows, nothing has really changed in the overall perspective in the metals complex. So, due to me being on vacation, and not really having much more to add to our expectations, I am going to keep this rather short.
My expectation is that we can see a downside reaction in the complex within the next several days, which will set off what I want to count as a 2nd wave retracement. While I still have a general support box on the charts for now, once we have confirmation that the 2nd wave has begun, I can adjust the box a bit more accurately. My primary signal level for the 2nd wave will be when the GDX breaks below 23.90.
I want to reiterate one point I have made in the past. Clearly, standard retracements usually approach the .618 retracement of the prior 5 wave structure. However, in the last two years since we bottomed, we have seen deep retracements in the complex. But, once this market begins to transform into what most others “out there” will recognize as the next stage of the bull market in the complex, retracements will likely become quite shallow, because, as they say, “the chase is on.” So, at this time, I am truly unable to prognosticate whether this retracement will be deep or shallow, since I have no evidence yet that the chase has begun. But, once the initial drop off the top of this 5 wave structure completes, it will give us more insight as to whether the retracement will be shallow or deeper.
Moreover, if we see a strong move through the 25.25-25.40 region in the GDX from here, it would open the door to having seen a shallow retrace for the 2nd wave already. But, as for now, that is not my expectation. Yet, please stay on your toes, as the market is at a very interesting juncture at this time.
Lastly, please remember that the VERY bullish trigger is ONLY when we break back over the top of this first wave, after we complete the expected 2nd wave retracements. Until that happens, I will retain a CAUTIOUS bullish bias.