Signs Of Bottoming - Market Analysis for Sep 4th, 2024
By
Avi Gilburt
I am truly amazed that each and every time the metals see a pullback, many go off the deep-end, thinking that it is the end of the world, or, worse yet for many of them, the end of the bullish structure in the complex. Yet, nothing is further from the truth. The metals are still set up to rally. The only issue we have to deal with is just a deeper pullback than I had initially expected.
Of course, when it does begin its next rally, we will likely have an exceptionally small pullback before it continues its break-out, and people will complain about that too. Well, I guess you cannot make everyone happy. But, if you take a step back, you would recognize that the metals and miners have done quite well in 2024. In fact, silver is up 22% (yes, even with this deeper pullback), whereas GLD is up 21% and GDX is up 23%. Interestingly, NEM is up 80% over the low we caught in early February. Those certainly are some numbers to complain about. (smile).
In the meantime, the decline has certainly slowed, and the upside consolidation we have seen from yesterday’s low has even raised the MACD on the 144-minute silver chart to the point where it is set up to provide us with the traditional bottoming signal wherein price makes a lower low in a 5th wave of the c-wave of wave [ii], whereas the MACD will likely make a higher low.
So, yes, as long as silver remains below 29, I am expecting a 5th wave lower low. And, the same applies in GDX as long as it is below 38. We would need an impulsive rally through 29 and 38 for silver and GDX to suggest that a low has indeed been struck.
As far as gold is concerned, it really is a bit of a mess on this pullback, so I do not have anything to add on its micro-structure at this time.
So, I am going to maintain a bit more patience, and I suggest you do the same. We have made some nice money in the metals complex in 2024, and I still do not think we are done. But, we still need the next 5-wave rally to confirm that 2nd waves are coming to an end, and we transition into many 3’s and 4’s during the next rally.
