After I sent out the addendum to the mid-week update, I have gotten many more questions than I had expected. It seems that I have confused more people than helped with the addendum.
So, please allow me a few more minutes to reconcile the two updates, so you can understand what I am thinking.
Right now, as I have noted, the metals market is in a region of uncertainty. Most often, we will have a bias as to how the near term and intermediate term in the complex will play out. However, with the last failed break out attempt, the market has placed a significant amount of uncertainty within the region we now find ourselves within.
While I now have a reasonable bullish count, as presented in the addendum, I still cannot call it my “primary.” Nor can I reasonably call the bigger down set up my primary, just yet. Again, the only way I can view this region we now find ourselves within is as a “region of uncertainty” as I cannot consider either count as reasonably more probable at this time. And, even though I know this may not be what you want to hear, as most investors want something in black or white, sometimes the market does not allow me to present such a perspective for the near-term time frame.
Rather, it will take the next rally that I have been expecting to provide me with a reasonably probable perspective. So, yes, I still want to see a rally and how high that rally takes us in the GDX will provide a reasonably probable perspective.
So, for now, I am still expecting a rally to take hold, and how it develops SHOULD provide a much clearer picture for the overall complex. Yet, as long as the ABX – as one example – maintains below the 18.35 region, I will lean towards the more bearish near term potential.