-- Published: Wednesday, 22 April 2015 | Print | Disqus
By Avi Gilburt
First published Sat Apr 18 for members:
While the metals continue to meander, I still remain bullish over the next few months, and bearish into later this year. And, yes, I still believe that lower lows will be seen, as the final lows to the 3+ year correction have not yet been seen.
During the past week, I sent out a Market Update to subscribers which included the following:
The main chart upon which I would like to focus is the daily silver chart. Take a look at the pullback we have seen thus far, which really does track quite nicely as a corrective pullback. While there is still potential for one more lower low in the micro count to be seen, it is not necessary, and we can consider the pattern as just about completed to the downside at this point in time.
Specifically, if you look at the daily silver chart Slow Stochastics, we are in the bottoming region. Normally, this would concern me as the stochastics traditionally imbed down here, but that is only in the heart of a 3rd wave down. And, due to the manner in which we have dropped from the highs, this does not look or act like a traditional 3rd wave down. Furthermore, the RSI is now moving into a bottoming region we have seen set up rallies in the past. So, ultimately, as long as we do not see a sustained break of 15.80 in the silver chart – which I have mentioned for the last several weeks - I will continue to look up for a rally to take hold.
As for GLD, the support levels I am now watching are the 113.35 and the 112 regions. And, in GDX, they are the 18.77 and 17.90 regions.
With the metals unable to take advantage of an immediate break out pattern they had this past week, it suggests that downside may be seen before the next rally takes hold. But, I am not going to expect huge downside moves before the upside pattern continues. Again, if you look to the daily silver chart, take note how the price has “waited” for the lower Bollinger Band to catch up to price, as it now serves as support. So, while we may see a temporary spike down in silver below the 16 level, I believe that will likely be reversed, and then begin the next phase of the expected rally to the 19 region in silver.
As I have been saying for quite some time, the market almost needs to rally in order to raise market sentiment to levels that can support the type of decline to lower lows which we expect. So, until we see that rally, or we break the cited support in all products, I am unable to become immediately bearish in this complex, and will maintain my short term (next two months) bullish perspective unless it is clearly proven to be wrong.
See Avi’s charts illustrating the wave counts on the metals below:
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.
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-- Published: Wednesday, 22 April 2015 | E-Mail | Print | Source: GoldSeek.com