As the metals continue to “leak” to marginally lower lows, we still have no evidence that the complex has bottomed despite the fullness of the downside structure.
When we look at the GLD daily chart, we see that the a=c target is actually a bit lower than where we currently reside. And, I think it is quite reasonable to assume we will get to that target in the coming weeks. Moreover, it also suggests that we still see a 4th wave bounce before we see a 5th wave complete this long term correction down to the a=c target region.
As far as the divergence I want to see in the chart, consider that the a-wave bottom still provided us with a lower low in the MACD relative to where we currently reside, even though price has certainly dropped lower. So, the positive divergence set up still remains in place. Ideally, I still want to see the MACD come up off the floor during a 4th wave bounce, which I still believe is quite imminent. And, when that occurs, I believe that all lower lows thereafter are strong buying opportunities.
In both the GDX and silver, we are still “leaking” lower as well, as the market strikes marginally lower lows. But, the divergences still remain quite evident on the chart. Yet, until we have a 1-2 off the lows fill in, we have no strong suggestion that a bottom has been struck. In repeating what I noted earlier, the GDX still has more potential for a long term bottom as being struck down here, as the wave count is much more full in that structure. Yet, the silver chart still more strongly argues for a [iv][v] before a final bottom is struck in the coming weeks. But, as I have also noted, I would be glad to admit that this perspective is wrong if we see a clear 5-wave rally off the low, followed by a corrective pullback and follow through over the high of the initial 5-wave rally.
For now, I still remain in the “bottoming”” camp for the metals complex. Yet, I have no clear indications that the lows have indeed been struck. But, the one thing that does strike me is that those who are aggressive in their positioning and buying into this decline will likely be quite pleased when they look back a year from now. Yet, for those that are more conservative, I strongly suggest that you allow the initial [i][ii] to develop off the lows before you consider moving into this complex.