I May Be Making a “Bottom” Call Soon

For the last 4 years, we have heard most analysts and pundits call the end to the metals correction, only to see the market head lower.  And, many of them have done so many times.  However, if the market takes a direct route to the lower levels we have been targeting for the last several years then I may finally be calling the bottom myself for the first time.  While I will still be looking for “confirmation” with a 5 wave structure off those lows to be more certain, I am going to be viewing the next lower lows as potentially ending this 4+ year correction.

But, before I move into the charts, I want to point a few things out. This was a very interesting past week, as there were several things I noticed within various articles I read.

First, I was honored to be cited by a ZeroHedge article this past week, who noted that we have a “very good record of calling the wiggles of both the bear market since 2011 and the preceding bull market.”  But, their article was appropriately focused on the fact that many analysts believed that the last lows were the final lows, whereas we were the only one they cited which was still looking for a lower low.  They correctly concluded it was likely that a lower low was going to be seen.

But, a number of people were taking me to task this past week for ignoring the Fed and suggesting that market participants do the same.  So, I will be coming out with an article soon on KITCO about why this is the appropriate way to trade this market, and why those that have followed the Fed for cues about market direction in the metals or dollar have often wound up on the wrong side of this market.

So, now, let’s get to the charts.  As an overall perspective, I want to note that it is quite possible that the market simply takes a direct route to the lower lows, and completes this structure within the next month.  After thinking about this over the weekend, I have decided to view this as my “primary” count, but I am going to keep a very tight leash on that primary classification, since there is still a strong potential that we see that bigger bounce I was looking for last week before we head to the lower lows.

While the GLD and silver are, for the most part, straight lines down, it is hard to be able to subdivide this decline, since there is very little retracement to utilize for “markers” as to where we are in the micro count.  For this reason, I am going to be using the 15.20-15.40 and 106.50-107.50 resistance in silver and GLD as my guideposts.  As long as we remain below that resistance, the market can be viewed as setting up to continue directly to the lower target regions on our daily charts.  Ideally, silver should drop below the 14 region, with an ideal target at 12.75, and GLD still maintains its ideal target at 98.

In the GDX, we have a bit more of a guidepost with a potential i-ii, (1)(2) struck off the recent highs in the more aggressive downside count.  That means that as long as 14-14.40 resistance is respected, the market will likely continue down in wave (3) of iii as noted on the chart.

Alternatively, if the market is able to move through those resistance regions, then we can view the GLD as rising in a deep (b) wave retrace, with silver and GDX rising in a deep wave ii retrace.  Should we see a move through those resistances, then I will adjust the count in the mid-week update sent to all members at Elliottwavetrader.net. 

Ultimately, one way or another, we are getting much closer to being able to finally call the bottom to this 4+ year correction.  The only question now is the specific path, and if it will be quick, or just a bit more drawn out.

See charts illustrating the wave counts on the GDX, GLD and YI at https://www.elliottwavetrader.net/scharts/Charts-on-GDX-GLD-YI-20151108925.html .

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Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.