Metals Are Still Trying

While we have had various indications that a low could be in place in the various charts we track (as I have been noting about the daily MACD indications), we still have not seen a “clear” 5-wave rally off that low to make that a much higher probability.  And, at this time, the only way we would see that potential in GDX and silver would be with leading diagonals.  Yet, as I have said many times before, leading diagonals are not the most reliable of trading cues, as they so often are really only corrective rallies.

In silver, the market seems to be attempting a 5^th wave rally for wave [1].  As you will see from the gold analysis below, it is possible it is still within the 4^th wave as well.  But, as it stands right now, I still have no indications that a set up is in place yet that is pointing us deeper into the support box below.

In GDX, we have the same issue as silver.  It seems to be trying to take us to a higher high for a 5^th wave.   But, the minimum target I would expect in a leading diagonal is the 1.618 extension of waves 1-2, and we are still quite a bit away from that target in the 38 region. And, as with gold and possibly silver, we may still be within a 4^th wave flat structure.

As we see in the attached GLD 60-minute chart, we are still attempting to complete a diagonal.  And, as I have highlighted numerous times, the question still remains as to whether this diagonal is an ending diagonal for the c-wave in purple (which would point us down to a lower low in the alternative wave [4] structure, or if it is a leading diagonal for wave 1 of the c-wave of the [v] of V of [3].  Assuming this even completes this diagonal structure, we would need to see the manner in which the market pulls back from that completion to distinguish between the two paths.  A corrective pullback keeps us looking higher for the green c wave of wave [v] of V of  [3], pointing us north of 260, and an impulsive 5-wave decline suggests the purple path is playing out.

As you can see from the GC 8-minute chart, I am still thinking this would count best as a flat in GC, which suggests one more bout of weakness to come in a c-wave.  As long as we remain below the high struck on January 10^th, I am going to view this as an a-b-c structure for wave 4, which still needs a c-wave down to complete.   

So, for now, we will likely remain somewhat uncertain as to whether the next rally has begun in earnest, but the market is certainly trying to develop that initial 5-wave rally.  But, I want to continue to note that I do not believe that the larger degree metals bullish cycle has run its course, as I still view it pointing  much higher before completion, as there is at least one more major rally structure that has yet to complete.