Metals Continue To Meander
By
Avi Gilburt
There really is not a lot more for me to add to the metals analysis at this time.
As GDX and gold continue to meander, we are still awaiting for the next signal that a bottom has been struck and the next rally has begun. But, thus far, I cannot say that it is highly likely yet.
In GDX, while we have a potential 5-waves up off the recent low, and on a nicely divergent daily MACD, I still do not have a clearly completed 2nd wave. I am waiting for the market to potentially provide us with either a c-wave in wave ii, or a clearly defined wave [i] of wave iii. But, as far as bottoms go, this one has the most likely potential. However, nothing of which I am terribly confident just yet.
In gold, we also have a nicely divergent MACD on the daily as well. And, as I explained before, this will not be easy to determine if the 5th wave is in progress, since it will be taking shape as an a-b-c structure. And, we really cannot distinguish between an a-wave in the 5th wave in an ending diagonal and a corrective rally. So, we will have to be a bit more patient on this one as well, as I believe we will soon see evidence that we either will be heading to a lower low to complete a more protracted wave [iv] or starting the c-wave of wave [v] of v of [3].
Silver has been the bigger issue. I still have no clear structure suggesting it is ready to begin a bigger rally. In fact, if silver continues along this type of path, then we may not get silver’s real move until wave [5] of 5 of [v] of iii is taking shape in gold, which can be seen on the daily GLD chart.
Therefore, for now, there is not a lot to do in the complex if you are looking for an aggressive trade. The most aggressive trade I can come up with is a hedge on GDX and GLD, unless we see a more clear 5-wave rally, which would need a higher high in gold, as you can see from the 8-minute GC chart. But, even that structure would be as a leading diagonal, which cannot yet be trusted until we see further evidence supporting that path.
