Spike Down Still Possible

This update is going to be mostly focused upon on silver and GLD since they are the ones most in jeopardy of another decline phase before a bottom is seen.

At this point in time, I cannot say that GDX has given me strong indications that it has bottomed, but as long as it maintains over 26.50/26.80 support, I can view it as having bottomed and on its way higher to completing its next larger degree 1st wave of wave iii.

As far as GDXJ, it should maintain over 38.50/.65 to keep pressure up in its wave i of (iii) as well.

When it comes to GLD and silver, we have been hitting our head on the resistance region I have been outlining of late.  And, as of yet, I have no strong indications that we have indeed bottomed.  In fact, both charts can still see another spike down before this pullback is completed.

As you have seen, GLD has been hitting its head on the 139.70 important resistance I have noted of late. And, until it can move strongly over that region, I cannot assume we are in wave 1 of v (3) off the lows.

Most importantly, silver is still not providing us strong evidence this pullback/correction has completed.  As most of you know, I will usually side with the more bullish wave count when it comes to the metals.  However, at this time, I cannot do so in silver because its downside structure has not been completed in a standard 5-wave c-wave decline.  And, until that happens, I have to let silver PROVE it has bottomed.  Thus far, it has not done so.

However, I have added a bullish i-ii structure off the lows, but we will now need to move through the 17.50 region (1.00 extension within that i-ii structure) in order to convince me that it has indeed bottomed.  Until such time, I think the most reasonable expectation is to see that 5th wave lower to complete this c-wave in standard form.  But, I have given you my parameters as to when that becomes much less likely. 

The last technical point I would like to make is that the GLD daily chart now has a nice set up for a positive divergence on its MACD IF we do see that lower low in GLD.  This also supports my perspective of this chart being in a bottoming structure.

But, again, remember that I am trying to confirm a bottom to the complex, and until the GLD and/or silver take out their respective resistances, I am simply unable to do so, as they retain a reasonable expectation of that lower low. 

GLD 8min
GLD 8min
GLDdaily
GLDdaily
GDXdaily
GDXdaily
GDXJ
GDXJ
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.