Can The Metals Go Higher?

I want you to take note of the title to this write up.  I did not ask if the 4 year correction has come to an end.  The reason is that all indications are still that lower levels will be seen.  But, it does not mean that the market cannot continue to rally before setting up for those lower levels.

Last weekend, I noted:

“It sure seems as though the GLD, along with silver and the GDX, are getting ready to begin a rally in the near term.  My expectation is that the impending rally will only be corrective in nature, setting us up for the run to the final lows in this market which should end this 4 year correction.”

So far, we have gotten our rally.  The question now is if it is about to end prematurely.

As of the close on Friday, the only chart that has the clear potential for a topping scenario to take us directly to lower lows is silver.  GDX and GLD have not provided me with any clear short set up just yet.

Remember, my ideal target for this rally for the GDX was the blue box with a minimum target of the 15.45 level.  However, both the GLD and silver have reached their minimum upside targets at this point, so I am questioning whether we see much more upside on the GDX.  Also, note that the GLD and the GDX have now both struck their .618 retracements of the drop from the August highs.  And, that is why the market paused on Friday. 

As of the close on Friday, the only chart for which I can make a colorable argument with a 5 wave down move from this week’s high is silver.  There is nothing clear in the GLD and GDX that suggests a top has been made which points us directly to lower lows. 

Neither GDX nor GLD have given me a 5 wave structure off the highs to tell me to short the market.  And, until I see such a 5 wave decline, or a break down in GDX below the 13.40 level and 106.85 in the GLD (.618 retracement of the week-long rally) in impulsive fashion, I don’t see anything on either of those two charts YET that suggest we are about to head down to lower lows.  Rather, I can certainly accept that we can see a b-wave pullback which maintains over 106.85GLD and 13.40GDX before we head higher towards the 110-111 next resistance region in GLD, and the 15.45-16.09 region next in the GDX.

In the upcoming week, I will be watching the manner in which these 3 charts develop very closely.  Even though I suggested buying at the last lower lows, I am still expecting we will get one more buying opportunity before this 4 year correction has ended.  So, I will clearly be sending out a Market Update to all members of Elliottwavetrader.net once we have the downside set up in place to take us to lower lows.  But, in the meantime, I have noted in our Trading Room on Friday morning that I have begun to hedge my longer term long positions.

See charts illustrating the wave counts on the GDX, GLD and YI at https://www.elliottwavetrader.net/scharts/Charts-on-GDX-GLD-YI-20150920836.html .