The Metals Seem To Be Waiting For Something

The metals have been meandering now for weeks within the same region.  And, it almost feels like they are just waiting for something before they begin the next bullish phase.  So, it just makes me wonder again if everything is going to rally together for the rest of 2021 across many markets, similar to what we experienced in early 2016.   And, the set up continues to develop as such.

Be that as it may, it is still conjecture.

In the meantime, I still have no clear indication that the GDX has indeed bottomed, or if it is trying to stretch for a double bottom or a nominal lower low.  As you can see from the attached 8-minute chart, the most bullish chart has this as a leading diagonal for wave (i) of i, as presented in green.  But, we need to break out over last week’s high to even consider this potential more strongly.

Rather, I think there is just as good a probability that we see a lower low.  The problem is that both sides of the market present us with 3-wave structure which does not allow for a higher probability expectation.  

In the meantime, GLD is just barely retaining its immediate bullish structure.  But, as I say so often, when a market has a set up to break out and chooses not to do so, then it often means that we have not really completed the prior correction.   This leaves the door wide open for the dreaded lower low in GLD as well.  

But, do take note of the gorgeous positive divergent set up on the daily charts in both the GLD and GDX.  Based upon this factor, along with the many other signs we see for bottoming across the complex, this pullback is a strong buying opportunity, especially if we do see lower lows.

Silver also seems to be having the same issue of indecision, and has not yet allowed me to take off the alt iv in yellow.  So, nothing has really changed in my overall expectations for silver either.

I know this pullback/correction has taken us deeper in GLD and GDX than I had initially expected.  And, I also know that this has taken us almost ¾ of a year.  Moreover, it has been a very complex correction to deal with since there has been no clear 5-wave structured c-wave to prepare us for a higher probability bottoming.  But, I think the divergences we are finally seeing in the daily charts for the GDX and GLD are providing us with that higher probability bottoming signal we have been seeking for quite some time.  

And, just like all corrections, this one will be ending, and the next bullish phase I still expect will be seen in 2021 should begin around the corner.  But, we still need this market to make its decision about a lower low or a take out of the prior week’s high to provide us with more clarity as to when that next bullish phase will begin.

GLD 8min
GLD 8min
GDX8min
GDX8min
GDXdaily
GDXdaily
silver144min
silver144min
Avi Gilburt is founder of ElliottWaveTrader.net.