Still No Breakout In Metals YET
By
Avi Gilburt
Silver is a chart that has me on my toes right now. It has been grinding up to its pivot of late, but I am still of the opinion that we can see more of a pullback.
If you look at the attached 8-minute chart, you will see how close we are to the pivot, which is the .618 extension of waves 1-2, within wave [3]. And, within that wave 3 of [3], I have a i-ii, [i][ii] count as well, after wave ii pulled back and held the .618 retracement of wave i.
Also, take note that I have adjusted the larger degree pivot on the 144-minute chart, which if broken through would have me in wave 3 of [3]. I had to recently adjust it due to the new contract that silver futures are on, which is the May 2025 contract. Also, take note that the larger degree pivot is at the 1.00 extension of the smaller degree wave count presented on the 8-minute chart. So, you will need to choose which chart you would want to trade for more assurance, as clearly moving through the pivot on the larger degree chart will provide greater assurance of a break out potential. But, what is interesting is that the lower end of the smaller degree and larger degree pivots are basically the same around the 34 region.
So, again, silver is providing us with a break out set up. But, we have seen several of these set ups in silver over the last few years, yet none have actually triggered and followed through. So, it likely pays to be a bit more patient to allow this one to do so.
For now, I am still seeking at least a wave [ii] pullback. However, should silver begin to rally through the 8-minute pivot, then I am going to assume we are likely within wave [iii] of iii of [3], and if we are able to exceed the pivot, we can place our stops at the bottom of the pivot, and I would then consider adding more aggressive long positions, again, with stops at the bottom of the pivot.
Due to the move higher in GLD, I have fully adopted the prior blue count, with the view that we still have waves v of 3, 4 and 5 yet to complete the larger degree wave [3], which can be seen on both the 60-minute and the daily GLD charts. It would take a break down below wave iv to suggest that wave [4] has potentially begun. But, taking a look at the MACD on the daily chart does tell me to be a bit more cautious up here with GLD.
GDX still has retained its potential for the yellow count. And, until it takes out 42.86, that count still does concern me a bit. And, similarly to silver, it would need to take out its pivot overhead on the daily chart to have me strongly in a 3rd wave rally. Until then, I remain cautiously optimistic.
So, while we have seen these types of upside set up several times in the past in both silver and GDX, their inability to have followed through does suggest we have to maintain some amount of caution until they prove themselves. But, when they do, it will likely be unmistakable, as both have some major catch-up moves I am expecting.
