Sure Looks Like A Triangle

Unfortunately, there has been nothing to really move the needle in metals, as we have been going sideways now for the last five weeks. But, the one thing that I can add is that gold looks like an almost completed triangle.

As you can see from the attached 60-minute gold chart, we seem to be working on the e-wave of that triangle, which can push higher one more time. So, the parameters seem to be rather clear. A break of 4023 (take note I am on the December contract now) would suggest we are in a 5^th wave down. And, it would take a break out over 4231, with follow through over 4353 to suggest that the bottom is already in place and the larger degree (b) wave rally has begun, which has a minimum target of the 5100 region.

Silver has a similar posture in place as well. Silver’s support is clearly the last low at 55, below which suggests we are in the 5^th wave down. In order to suggest that the bottom is already in, then we will need a break out over 63.73, with follow through over 66.20 making it likely that we have begun the (b) wave rally with a minimum target of 97.

I am not sure what to make of GDX. It has become very overlapping and unclear at the micro level. While the bottom may be in place, resistance is now at the 80.50 region. And, as long as we remain below that, I have to assume a lower low will be seen. Should we be able to break out over that level, then I have to start considering the potential for a leading diagonal for a bigger wave i is taking shape, for which I have outlined a potential path on the attached 8-minute GDX chart.

Overall, the metals market is in the same overall “bottoming” posture. The question still remains as to whether a lower low will be seen before the next major rally takes hold. For now, I am still leaning towards a lower low for which I am retaining some dry powder in order to buy a spike down in a 5^th wave.