Today, two things happened which have provided us deeper insight into the metals complex, for which both I have sent out alerts during the day.
First, I want to start with GLD, and will reprint my update:
“. . .it takes a break down below 120/121GLD to suggest wave (ii) is in progress. In the meantime, take note of the MACD on the daily chart which has now gone negative, and clearly providing us negative divergences up here. So, even if the market is able to push higher one more time to complete wave (i), these are clearly the topping signals we see as we approach the completion of a rally off the lows.”
Second, I want to note something today in the NEM:
“With NEM making a marginally higher high on this current rally, it is starting to give us warnings about a more immediate bullish outcome, as discussed in the weekend update regarding the yellow count. Stay on your toes.”
For those that remember my weekend analysis, if my “weaker” stocks begin to set up bullishly, then not only will I have to stop out of my hedges in the complex and ride my longs, it will also reduce any potential for GDX to see those lower lows to 30% or less, and place us in the yellow count. Moreover, if NEM does break out, then I would expect it to lead the complex to the upside.
With the micro higher high struck in NEM today, it warrants watching the NEM VERY closely, for if the “weaker” stocks are not going to act weaker, that will place a different spin on immediate expectations in the complex.
And, as for silver, thus far, it has been the best behaved of the metals charts for many months. And, it is still behaving at is should. We now seem to be moving down into the box which will either support it as an (a) wave of wave (ii), or it may be a wave (4) in a more expanded 5-wave structure, as outlined over the weekend as being my alternative right now. I suspect that this 5th wave will likely take shape along with a break out in NEM. So, for now, this still remains my alternative, but please understand that silver is now likely in a buy-the-dip mode over the coming months.