By: Avi Gilburt
I am not sure how much more I can add to what has been said over the last two weeks in the metals complex.
At this point in time, it is quite clear that the metals are testing support. As specifically noted about silver, the 14.60 support region is what I want to see holding as support here. While I can accept a spike and reversal of that level, a sustained break of that level opens the door to a 13 handle for a lower low bottoming in that chart.
As far as GLD is, the 119 region is the similar support region I want to see hold for a wave iv. And, in GDX, you can see we are now approaching the bottom of our support box as well.
The one point I can add to the GDX is that since it I am counting it as a potential leading diagonal, it would seem that it is attempting to provide us the overlap in waves iv and i which is common in diagonals. That could explain the depth of this pullback. But, I also want to note that this is why I have problem relying on leading diagonals since they act like corrective structures until completed.
The other point to make about silver is that we see the 144-minute MACD still holding its positive divergences. And, should it continue to hold that positive divergence, the reversal we see off divergences this extreme is usually quite powerful.
In summary, the metals are now pushing on all the respective supports and how they handle this posture in the coming week will be key in determining whether we see a completed 5-wave structure in GDX and GLD in a more ideal sense, or if we will get a much deeper pullback in the coming weeks, which should also put us on alert for the larger degree yellow alternative count as presented on the daily GLD chart.
Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.