Metals At Important Pivot

First published Sat Sep 24 for members of ElliottWaveTrader.net:  If you remember, two weeks ago, the sentiment in the metals complex was quite bearish.  Yet, as I noted last weekend, I had an issue with an immediate drop lower:

So, you may consider me foolish, but I have to abide by standards, and am still looking for that rally to complete a “standard” b-wave, which needs a (c) wave rally to commence quite soon.  Moreover, Dr. Cari Bourette, of MarketMood.net, is also expecting higher in the upcoming week based upon her gold market sentiment analysis.  In fact, she even has the potential for the entire correction to imminently complete. 

And, the market surely provided the upside follow through we wanted to see.

Last weekend, I also provided a discussion about how I follow “standards” when analyzing the market.  The clear reason being that markets often provide us with the same general patterns over and over the majority of the time.  That is why we call them “standards.”  This past week, the market almost completed what would normally be viewed as a “standard” (c) wave in a b-wave flat.  But, the market came up one wave short and only completed 3 waves up off the lows.

While there is still potential early in the coming week for the market to provide us with that 5^th wave higher, it is not necessary within the larger corrective pattern.  As we have been outlining all week in our Trading Room at Elliottwavetrader.net, this rally can also be a second wave in a c-wave down, so it is not really necessary that it makes a higher high to still point lower.  And, now, since we did not get a full 5 waves up, it has even opened the door to the potential that we may see a b-wave triangle develop over the coming weeks.   That would push the timing for the completion of this correction out by as much as a month, or maybe even a little more.

Ultimately, there was nothing I have seen in the market over the last week which would strongly suggest that this correction has run its course.  Rather, the action has enforced the perspective that it has not.  While those that view the market through a bullish prism may be able to fashion a 1-2, i-ii count off the recent lows in the complex, I think that is a low level probability at this point in time, even though I will be tracking that potential should we see a strong move through initial resistance levels in the coming week (GDX 29.10 and silver 20.91).

At this point in time, I believe the predominance of the evidence suggests that lower levels will be seen, and it would take silver to break out over the August high, the GDX to break out over 31, and GLD to break out over 132 for me to take a much more immediate bullish stance on the metals complex. And, as usual, if I should see any signs which would make me adopt the more immediate bullish perspective, I will send out an Update to all our members at Elliottwavetrader.net the moment I see it.

See charts illustrating the wave counts on the GDX, GLD and Silver (YI) at https://www.elliottwavetrader.net/scharts/Charts-on-GDX-GLD-Silver-YI-201609251381.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.