Today, both the GDX and GLD have broken through their upside pivots. And, if the bottom is in place, this is a VERY big step towards confirmation.
You see, when the market has a 1-2 structure off a low, we need to see price move through the market pivot – the .618-.764 extension of waves 1 and 2 – and hit at least the 1.00 extension, thereafter not falling back below the pivot. This is where we now stand in the metals complex for GDX and GLD.
But, I want to go back to the triangle I was tracking two weeks ago. I would say that 80-90% of the time we see a triangle consolidation in an Elliott Wave pattern during a downtrend, we will move on to see lower lows. If we are now able to hold the market pivot on the 8-minute GDX chart, and continue higher towards the ideal target for wave i in the 37-40 region, this will be one of those rare circumstances that a triangle did not lead to a dreaded lower low.
But, now that GDX is over the pivot, we have to make sure we do not break back below it, and continue towards at least the 37 region in the coming week or so.
In GLD, we need to continue to rally to at least the 165+ region (1.00 extension of waves 1 and 2 on the 8-minute chart), and now break back below the pivot on that chart to keep pressure higher to complete our initial 5 waves off the recent lows. This would confirm that the bottom is in place, and we can begin planning for the next bullish run in the complex as we move through 2021.
As far as silver is concerned, I think it will continue to be sloppy, as per my weekend update. For if we do indeed continue higher in the complex over the coming week or two to complete 5 waves up, silver will likely only be completing its 5th wave in a leading diagonal for wave [i], again, as outlined over the weekend.
So, the metals have now moved into a posture where they MUST keep pressure higher to prove that the bottom is in place. For if they slip here, lower lows will be in the cards.