A Bit Of A Sticky Place In Metals

As I have been saying for several weeks now, the silver chart has been providing us with the clearest signals in the metals complex.  Therefore, I have been hyper-focused on silver of late.

But, even where silver is positioned right now does cause a bit of consternation.  You see, the structure into last week’s high did not clearly look complete.  Rather, there is a reasonable interpretation that would suggest that high is a [b] wave within an expanded b-wave structure, as I have outlined on the 8-minute silver chart.  Therefore, the 5-wave decline we just saw into today’s low could easily be a [c] wave within a b-wave.  

But, in order for that expanded structure to be accurate, we need to see a clear 5-wave rally off today’s low.  And, I cannot say that this is what the silver market has clearly presented to us today.  Rather, it is looking a bit more like a 3-wave rally structure thus far.

Therefore, if we see an impulsive decline from today’s high, that will likely signal that wave iv (red) is indeed complete, and that we have begun a decline in wave v of the c-wave of [2], pointing us down into the 19-20 region.  

Now, if you have been following closely, you would know that I am almost “hoping” for a lower low in the GDX.  That would re-set the count, as shown in yellow, and likely set us up to start a true impulsive rally.  That type of rally would be much more tradable than a diagonal structure.  Until then, I am giving GDX a bit of room to let me know if we can get that lower low or not. And, if we get that lower low, it will be completed with a positive divergence on the daily chart, which would make that lower low a strong buying opportunity.

And, as far as GLD, well, I think we may be stuck in a larger diagonal, so even though I do expect much higher to be seen in the coming year or so, I do not think the structure will be easily tradable.