For the better part of the last 3 weeks, the metals market has been grinding sideways, and, to be honest, there is not much more I can add to what has been said. Yet, there are a few more things I would like to highlight.
The current structure in the GLD and silver both leave no clear interpretation to determine if we have another drop before the rally I want to see or if we are going straight up in the rally from here.
Then I move to the GDX, and that too presents in the same fashion. So, yes, it could either go up or down, but I am still looking for the rally to take hold, even if we see one more drop towards the 21.90 region first. However, please do note that a direct break down below the 21 region opens the door wide open to target the 17 region in the coming months. While that is not my immediate expectation, just keep that on your radar if the market starts to drop strongly from here.
I now want to highlight a few things about the ABX, which I have been noting much more of late. You see, ABX is a major component of the GDX and I doubt we will be ready for the major 3rd wave break out until the ABX has completed its waves iii, iv and v.
Now, if we look closely at the ABX chart, it seems we still may need one more squiggle lower to complete wave iii. For this reason, I am maintaining an open mind that we may see one more shake out to the downside in the entire complex before the bigger rally takes hold.
I know many of you have been hyper-focused on the smaller degree grinding in the complex of late. But, I want to point out something from the larger degree perspective on the ABX. I want you to note the positive divergences developing in the MACD on the daily chart. Now, if the market provides us with our expected wave iv rally in the coming month or so, it would take the MACD up a bit more, and provide us with even more positive divergences on the daily chart for wave v down. That would make the ABX a “screaming-buy” on the wave v drop.
In the meantime, I want to repost what I wrote today:
I am seeing soooo many getting soooo frustrated with the miners. Please take a step back and recognize that it is not "likely" that the miners will be going anywhere without us for a few months. Even in the best case scenario, as represented in the yellow count, we will still likely remain in this region for the next several months as the next (1)(2) take shape. And, again, this is the BEST case scenario.
Moreover, as I have been posting, the GDX is not likely going anywhere until ABX has completed its downside structure, and it still needs a iv-v over the next few months before it is likely ready.