It Is Getting Harder To Continually Look Lower

As I noted over the weekend the bears are bearish, the bulls are bearish and the gold bugs have resigned themselves to “hoping.”    

Even most of the bulls I read strongly believe that we have to see a capitulation drop below $1,000 in gold before a bottom can be seen.  But, as we know, when too many expect the market to do something, the market usually has a surprise in store for them.  Anyone remember how sure a thing it was that the gold market was going to exceed $2,000 in 2011?

I know many have been pointing to how long this correction has been taking, but the main reason it has taken this long is because the final segment of this correction seems to have developed as an ending diagonal.  And, ending diagonals see a significant amount of whipsaw but do not see large progression.  Now, does that not describe the market movement over the last 2 years?   When you consider that the low in the GLD in 2013 was 114, and the low we struck this past week was just over 100, that is not a lot of progress to the downside in almost 2 and a half years. 

For now, based upon the current action, it is not yet likely that we have struck our long term bottom yet.  Our longer term ideal downside targets have not yet been struck and we do not have our first 5 wave structure off the bottom to signal to confirm that a final low has been struck.  So, even if we do see further rallies before lower lows are seen, the action this week has made it unlikely that the final low has yet been struck.   

For those that are considering buying some of the individual miners down here, I would strongly suggest you wait for final confirmation that a bottom is in place before doing so.  The reason I say this is that, after our management team reviewed the mining stocks we have been tracking for our EWT Miners Portfolio, we saw a number of miners which still need lower lows.  The problem is that some of them have set ups in place that suggest they could go into bankruptcy if this market were to see the capitulation drop expected by most in the market.   So, there are number of popular mining stocks that are much more dangerous than many market participants believe.   

Lastly, for those that are interested in trading the 3X miner ETF’s, Larry White, our analyst that runs our short term miner trading service, has now exceeded 425% total return for 2015.  Yes, Larry has had two back to back 100% total return weeks.  And, due to the high demand, we have rolled out Larry’s service as a stand-alone service outside of our StockWaves service.  

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So, feel free to come join us at Elliottwavetrader.net for a 2 week free trial to trade alongside Larry and begin to earn some wonderful returns in this complex. 

See charts illustrating the wave counts on the GLD and GDX at https://www.elliottwavetrader.net/scharts/Charts-on-GLD-GDX-20151208985.html .

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.