If you look at the GDX chart, you will see that price is stuck right in the middle of the various patterns we have been tracking of late. Will the market continue to rally in a corrective d-wave in purple? Will it continue rallying in more of an impulsive structure for a larger degree green b-wave? Or, will it drop down in the more directly ending diagonal for the green c-wave lower towards 37?
Yes, we are stuck right in the middle right now. And, unfortunately, I really have no clear indication as to which is the more applicable count at this very moment. They all have reasonable probability based upon the micro structure after the rally we saw today. And, I would expect that by the time I write my weekend update, we will have a much better indication.
However, the one underlying theme is that this correction is not likely complete. Whether we continue to trace out the triangle, or whether we find a path to the 37 region for the green count (and, it is still possible we can rally back up towards the 45/46 region before that happens), we seem to still have come corrective action to contend with in the coming week or two.
As far as GLD is concerned, I really needed to see us strike at least the 177 region, wherein we would see a c-wave equal to .764 times the size of the a-wave, in order for us to consider all of wave iv as completed. Since we have come up shy thus far, I am going to be considering the potential for a higher b-wave rally to still be seen. But, the market is showing strong signs of bottoming, especially when we look at the MACD on the 60-minute chart.
As far as silver is concerned, there really is nothing more that I can add to the analysis from the weekend in silver. The downside has not been impulsive, so that potential 1-2 structure is still very much intact. But, it is hard to see silver preparing to attack the 35 region from here, while GDX and GLD are still languishing in their respective corrective structures. Needless to say, if there is a chart that I would consider hedging, it certainly would not be silver.
In summary, I am still expecting more corrective action to take place in the coming week or two. The specific path that the action takes is still very much a question, as there are too many possibilities I am seeing right now, as we seem to be stuck in the middle. But, the two underlying themes are that the correction does not yet look complete in both GLD and GDX just yet, and I still expect much higher levels to be seen in the metals complex over the coming months.