Quick Update - Market Analysis for Apr 14th, 2016

I am sure many of you are now wondering where we stand in the miners, and specifically in GDX after today's action.

Today's downside reaction lends support to the primary count of this being a b-wave top to wave ii.  We only have 3 waves up into that high, and that is what expanded b-waves do during bullish markets, which we expected.

However, as I noted in an update today, we needed to break 21.30 in an impulsive c-wave drop to suggest that we are heading down to complete wave ii.  Yet, the market stopped right at that level, and refused - SO FAR - to break lower to complete a c-wave for wave ii.  Moreover, the drop thus far is not easily counted as an impulsive structure down, which is what we normally see in a c-wave.  This has left the door open for the GDX to rally one more time to a 5th wave high to complete another 5 wave structure towards the 23.50-24.50 region next.

Right now, I am trying to be patient with the market, and not overtrade this.  I still have no desire to aggressively short this complex, especially with silver breaking out this week.  And, as we go lower, I take off some of my hedges.  But, if the market heads higher within the next week toward the upper target, it makes a strong case for a I-ii, 1-2 set up in the mining complex, with many individual miners looking quite bullish (after our review of our individual miners holdings last night for our miners portfolio).  This can set us up for a melt up in the miners going into the summer.

So, for now, I am going to maintain some patience and not overreact to anything we see over the next week.  I do not believe we will break out over the resistance box overhead, nor do I believe we will break down below the lower "buy, buy, buy" box for wave ii.  I don't think either is highly likely in the near term.  But, in between those two regions, the next week or so should give us strong clues as to how aggressive the upside in this market will be, so let's try and maintain a bit more patience.