Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain While Stocks Drop Again
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 10 15 2018
By: Ira Epstein

The ultimate financial crisis will be inflationary
By: Steven Saville

Bombshell Guest: Stephen Leeb Predicts 3-Digit Silver and 5 Digit Gold?!
By: Mike Gleason

SWOT Analysis: Gold on Its Best Run in Six Weeks
By: Frank Holmes

You Can’t Eat Gold
By: Keith Weiner

Technical Scoop - Weekend Update October 15 2018
By: David Chapman

Gold Market Update - the 7-year bearmarket phase is over...
By: Clive Maund

Beach Time
By: Larry LaBorde

Don’t Follow Fake News Or Fake Analysts In Metals
By: Avi Gilburt


GoldSeek Web

Still Looking for One More Rally in Metals

 -- Published: Friday, 27 October 2017 | Print  | Disqus 

By Avi Gilburt

First published on Sunday Oct 22 for members:  Yes, I still think we can push one more rally out of this market, but there is no question in my mind that risks have risen, as I have now been writing for over a month.  When the GDX broke down from its upper support in its last break out set up, it clearly should alert us all to the potential trap door just below us.

Now, as I read through the blogs and public articles, it seems most are looking for the metals to just drop from right here for a myriad of reasons.  (Well, that is, other than those who only see the word “UP” when you mention the word “gold” to them).  For those who usually place their expectation upon the immediate direction of the complex, it would seem that the recent drop in price has them expecting it will immediately continue to drop.  Isn’t linear analysis wonderful?  So, it would make sense, at least from a sentiment standpoint, that we need to get a number of them believing that the market is about to rally strongly, which will then trigger our trap door.

As far as individual miners, I am strongly suggesting that you have stops on all your positions (as we do on ALL our positions in our EWT Miners Portfolio), or at least have hedges on your positions, especially if we are able to get that rally I still want to see.  But, as an example, if the ABX is unable to exceed 18.35 on the next rally, and then breaks back down below the low we make before we begin the next rally, it opens the trap door for it to target the 11 region.  That is the potential for a 30% drop in that stock, which is a major component of the GDX.  And, it certainly supports the potential for the GDX to drop back down to the 17 region.

Now, I really do not want to scare you regarding the complex as a whole, as I am still quite bullish from the longer-term perspective.  Rather, I want to point out the potential risks we are now confronted with due to the fact that the complex failed to break out in its last bullish set up.  So, rather than view the markets while wearing rose colored glasses, I would rather view, and present to you, the market as it is.  I want you to clearly understand the potential risks I am seeing over the coming months, even if we get a rally to invigorate your bullish juices, as I am quite certain it will do for the rest of the market.

For those who are truly opportunistic, should we see a 5-wave decline take hold over the next few months (in other words, a c-wave drop), this may present to you a last major buying opportunity in this complex for decades to come.   So, it would be wise to maintain some cash on hand to take advantage of the opportunities presented by the market.

Additionally, I want to repeat something I posted on Friday.  For those of you who read my analysis regularly, you will know that I am not a believer in investing in metals based upon correlations.   I have presented much historical evidence as to why one should not be treating the metals as a contrarian trade to the stock market.  That is, unless I see some evidence to think they may be trading in opposite directions.

As I noted this past week, it certainly seems as though the equity market and metals market may be set up for contrarian trades in the coming months.  You see, we are looking for a wave iv pullback to begin soon in the equity market, while, at the same time, we are expecting a rally to begin in the metals complex. After that completes, we are looking for the equity markets to rally one more time into year-end to complete its 5th wave off the August lows, and, at the same time, it would seem the metals are going to drop into year end. 

Now, if we see the follow through on this pattern, it would suggest that the equity markets are going to top out in wave (3) off the February 2016 lows and enter a multi-month pullback in wave (4).  Again, it would seem that the metals would then be set up to finally begin their 3rd wave rally, and we know how far they can run over a 3-6 month period of time.  In fact, it should even potentially exceed the strength of that seen in early 2016.

So, while I am still quite bullish of the metals complex in the long term, I am very cautious of the potential of a sizeable pullback in the coming months.  And, how the next rally takes shape should give us more clues as to whether GDX can see the 17 region again. 

At the end of the day, nothing has really changed in my overall expectations in the main charts:

As I explained in greater detail last weekend, if the GDX is able to make a higher high in the 26 region in the coming weeks, then it leaves the door open that green wave (2) may not break below the July lows.  However, if the market is unable to develop a higher high over that struck in September, and then breaks below the low made before the current rally began, it opens the door to the GDX dropping down towards the 17 region before year end to complete a much more protracted wave ii, as presented in yellow on the daily GDX chart.

Ultimately, this leads me to the conclusion that the 2016 market highs will not likely be broken until 2018, and this will remain as my primary expectation whether the GDX sees a larger break down or not.  But, until we see how the next rally takes shape, we will not be able to ascertain with more certainty whether a bigger decline is in the cards into the end of the year, or if we will simply remain in the same consolidation region until then.  

With that being said, there is a potential micro-set up for a double bottom to be seen in GLD and GDX relative to the lows struck in early October.  Along with that potential micro set up, silver may still see one more decline as well.  But, as long as silver remains over the 16.50 level, I can still maintain my expectation for another rally to be seen in the coming weeks.

Overall, should we get that rally that I still want to see, I would suggest you use it to protect your metals portfolios, as it is still looking likely that we may not see a real break out until 2018.


See charts illustrating the wave counts on the GDX, GLD & Silver (YI).


Avi Gilburt is a widely followed Elliott Wave technical analyst and author of (, 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.


| Digg This Article
 -- Published: Friday, 27 October 2017 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2018 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.