Yes, We Are Still Bullish Metals
By
Avi Gilburt
While the metals market in GDX and silver have now dipped a bit lower than I had preferred, it has forced me to consider the alternatives I mentioned over the weekend. So, I spent the last hour running many different calculations as to what made the most sense in silver, as my prior count was clearly wrong. So, allow me to revise my view.
Again, I am going to start with the perspective that I still view the chart very bullishly. But, now that we have broken below the 33 region, I have come to the determination that we are likely one wave degree ahead of where I was considering to date.
What this means is that I believe we have completed wave [3] of [iii] of 3 of even a larger degree [3]. And, my primary count now has us within wave [4] with this pullback. This now gives me support of the 32 region for wave [4].
Of course, I have added an alternative to this count within yellow, but there are many reasons I am not a fan of that alternative at this time.
What this now means is that if you have stopped out of your short term options contracts, you will want to now see a clear 5-wave rally for wave i of wave [5] of [iii], and then move back into those positions during a wave ii pullback thereafter.
But, when it comes to your long-term positions, I have no reason to consider moving out of those positions yet. Keep in mind that silver is still “likely” going to see a parabolic rally similar to what was seen in 2010 before I believe this rally is coming to an end. And, it will likely occur during some 5th wave within this larger degree 3rd. Yet, there is no way I can foresee which of these 5th of 3rd wave degrees that may be. So, holding your main long positions is still quite prudent in my humble opinion. Once we see that type of move, I will then begin discussing with you the issue of beginning to cash out. But, we are clearly not there yet.
In the meantime, the GDX seems to be completing a c-wave of an a-b-c pullback as well, and seems to suggest that there is at least one more lower low to be seen before that c-wave is done. Clearly, our next target is going to be the 45/46 resistance region I have been discussing over these last several weeks. And, should we see a nice 1-2 set up pointing us there, I will certainly highlight it in the alerts I put out to our main service.
As far as GLD is concerned, I still think we can see one more push higher before the wave [3] is completed. So, I am clearly still bullish gold in the shorter term at least until we complete waves [iii], [iv] and [v] of wave [3], at which time I will then expect a multi-month pullback/consolidation (likely in 2025), for wave [4], which will likely set up the final parabolic 5th wave rally to complete this bull market which began in 2016.
Based upon the way my smaller degree expectation now seems to be lining up, I am going to assume that we will see the wave i in silver coincide with the rally in wave v of [3] in GLD, and wave ii in silver coincide with wave [4] in GLD, with both then setting up a strong rally as we look out over the next month or so.
In the near term, I think we may still see some weakness over the coming days. But, I will be on the lookout for the next 5-wave rally to signal the next segment of this bull market is underway.
