Switching Gears A Little – But, Does Not Change Bigger Picture
By
Avi Gilburt
The one thing I am doing right now is I am taking off the b-wave potential on this rally, and simply calling it an extension in the 3rd wave in both GLD/GC and GDX. But, in the bigger picture, that really does not change much, as it still has me expecting a larger degree 4th wave, with a 5th wave thereafter yet to come.
In GDX, our initial support now is in the 68 region, and we will need to break below that support to suggest that a larger degree 4th wave is in progress. And, my problem in the bigger picture is still quite evident as there is no real 4th wave to speak of in this larger degree structure. That is why I am still viewing that as the most likely path in the coming months.
In gold, that support is now at 3800. As long as we remain over that upper support level, I am going to have to watch the alternative blue count quite carefully, as it could mean the conclusion to this long-term cycle a lot earlier than I currently expect it. In fact, please take note that the monthly GLD chart has struck the bottom of the target box. So, while I am clearly not calling for the end of the cycle right now, I just want you to be aware that the probabilities may be rising that it is coming to an end sooner than later. For now, I am still very much in the (4)(5) camp, which still needs to complete.
Silver is at a VERY interesting juncture right now. To be honest, I have to more strongly consider that silver has completed the wave 4 of (3) pullback with that spike down we saw last week. And, that means we have a potential 1-2, and maybe even a 1-2, i-ii developing as we speak. I still do not like this count, as that really is not much of a 4 to speak of. But, I simply cannot ignore it now, and a breakout of today’s high will make me move in that direction.
But, take a look at the attached 8-minute chart. You will see that silver ran right to the top fib on the resistance box I had for an extended wave 5 of wave (v) of (5) of 3. And, this is the last chance I am giving the market to provide us with a more reasonable wave 4. But, no more.
However, if we take out today’s high, it would mean we are projecting to at least the 53 region, and potentially up towards the 55/56 region before this wave completes. Again, I want you to be VERY cautious as this next rally completes – assuming a break out sooner rather than later – as my alternative count has this as a multi-year b-wave top in the alternative, as I had presented in past updates. I will reiterate this perspective again in the coming updates should we see that break out this week or early next.
I want to make one more point about the “BUY” box on the 144-minute silver chart. In order for me to have a conviction buy, I will need to see an a-b-c pullback take us to the target box in price below, with the MACD taking us to the BUY box, or even below it. So, in order for me to take another aggressive long position, I will want to see both qualifications met.
Yet, should we see a break out sooner rather than later, I may take a smaller aggressive long position with a minimum target in the 53 region. We can make a better assessment as we see how the rally progresses.
For now, I am still very much in the camp that the entire complex sees at least one more 4-5 before this long term cycle completes. But, I am not going to be foolish about maintaining that view if we begin to see signs that the cycle may complete sooner rather than later, such as the blue count in GC taking shape.
