Same Bigger Picture View – But Mixed Micro Messages
By
Avi Gilburt
While the bigger structure right now is pointing lower, the micro structure is still not wholly clear, and providing some very near term mixed messages. Allow me to explain.
Starting with GDX, we seem to be working on a 1-2 decline in the c-wave. But, there is still a bit of a question in my mind as to whether the wave 2 is done, as we did not even reach the .382 retracement of the initial decline from the b-wave high. That is an unusually shallow 2nd wave retrace. So much so that a full 5-wave projection from the high this week points us to the 62 region in GDX, which is the 2.00 extension based upon the current 1-2 structure in place. So, this tells me something else may be in store, as that is significantly deeper than I initially expected.
So, of course, it is well within reason that the market may attempt another push higher for wave 2. But, the other consideration is that this may turn into a w-x-y pattern, which would target the point wherein a=c within this decline and point us to the 83 region. Moreover, if we are now completing the wave i down, the small size of this wave i would be more in line with the decline to the 83 region more so than the 62 region. But, I am making certain assumptions that can change based upon the follow through to the downside. So, we will have to track this carefully if we begin to break down below the pivot on the 8-minute chart sooner rather than later.
Therefore, as it stands now, it seems we are attempting a move down towards at least the 80 region, but it could be much worse than that, all depending upon how the market extends towards the 80 region and how it handles the pivot.
Both silver and gold seem to have unfinished business on the upside, as their patterns are not ideally complete. So, I have alternative counts in place which suggest this is a 4th wave pullback in an ending diagonal for this c-wave, leaving one more rally on the table before this corrective retrace is done. But, once silver breaks down below the wave ii in that potential structure – 82.95 – this would invalidate this alternative, and have us next focusing on the pivot. Again, and as I discussed in my full-member video this morning, if all we see is a smaller wave i of wave 3 down, it opens the door to the (b) wave structures presented on the larger degree silver and gold charts.
So, to review what I am saying, we are clearly still well within a larger degree corrective structure in the metals charts. Moreover, they are likely pointing lower in the coming weeks. But, there are still two questions that are unanswered yet: 1 – Do we get more of a bounce in this corrective retrace? 2 – Is there a smaller decline in the cards (per the (b) waves in silver and gold, which may align with the w-x-y in GDX), or are we indeed setting up for the big c-wave down sooner rather than later?
If we do not begin a bigger bounce VERY soon then the first question will be answered in the negative. And, we will have to watch the next decline to make a determination as to whether the bigger c-wave down has begun or not. But, the smaller this initial decline is (wave i down), the more likely the (b) waves become. Yet, since we know metals love to extend, we will still have to closely monitor the size of the 3rd waves down to make that determination for the 2nd question.
