With the rally we got in metals today, we learned quite a few things.
First, in gold and GDX, we really did not complete a clear 5-waves down. That means that the decline off the recent high is likely corrective. And, it means that we are likely in a series of 1’s and 2’s setting us up for a break out.
Ideally, I would want to see a c-wave down to complete the respective 2nd waves we are currently tracking.
However, as I noted this afternoon, when it was relatively clear that we only had 3 waves down, we have to be on high alert to see if we see a 5-wave rally off the low we just struck on this pullback. If we do get 5 waves up, and then break out over the high we struck this week, I have to then assume we have begun the heart of the 3rd wave rally. For now, I am still seeking a c-wave down in both GDX and GC.
Second, as I noted early this morning, silver was still set up – unlike the others – for a higher move in wave [v] of 1. And, as long as we remain below 24, I can maintain my expectations for a wave 2 pullback. Yet, if gold and GDX only need a c-wave down, then it is possible we may only see a fast spike down in silver which would be all of the wave 2 we get, and all three would then be aligned for their 3rd waves.
The main point I am making is that we are seeing impulsive rallies followed by corrective pullbacks. That means the market should be on the cusp of a 3rd wave break out. So, please stay alert and on your toes. After this set up has been developing, it can happen at any point now. And, if we see this current move up today continue higher to complete a micro 5 waves up, followed by a micro corrective 3 wave pullback, and then take out this week’s, well, that is our break out signal.
Stay alert. We are getting VERY close.