Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

It’s Time To Build The Gold GDX Launching Pad

Commodities / Gold and Silver Stocks 2018 Jan 19, 2018 - 12:42 PM GMT

By: Avi_Gilburt

Commodities

In 2017, the word “disappointment” took on a new spelling – “G-D-X.” After several failed break-out attempts in 2017, there is no question that it provided us a year of frustration.

As of Friday, the metals have now give us another indication that a break out attempt may be setting up yet again. And, just like the others we tracked last year, I am unable to tell you definitively whether the market will trigger that set up. However, after making higher highs off the December support on Friday, the metals have almost completed a 5-wave structure off those lows. That is the initial bullish indication for which we have been waiting in 2018.


This means we have now almost completed 5 waves up off the support we had been tracking into the December lows, wherein both silver and GDX bottomed within pennies of the support upon which we had been hyper-focused at the time, whereas GLD came up a bit short of its targeted support. So, wave (1) off those lows will likely complete in the coming week.

If the market is as bullish as we believe it may be for 2018, we should be preparing for a 2nd wave corrective retracement, which can take us into February. And, as long as the pullback is corrective and maintains support, that is the launching pad from which we can ignite the parabolic 3rd wave rally for which we have been more than patiently awaiting.

I have been getting a number of questions from newer members and those new to Elliott Wave analysis enquiring as to what we can expect in a 2nd wave pullback. The standard expectation for a 2nd wave is a 3-wave corrective pullback structure, which usually targets the .618 retracement of the first wave. The a-wave of that 3-wave structure usually targets the .382 retracement of the first 5 wave rally structure, with the c-wave then targeting the 618 retracement.

However, I want to note that when the metals really turn extremely bullish, they rarely see deep pullbacks, as most are quite shallow. In fact, it would not shock me to see a 2nd wave hold support at the .382 retracement. But, since we have not yet likely completed the first 5 wave structure for the 1stwave off the December lows yet, I am unable to provide solid target numbers for the .382-.618 retracement region. Yet, I have provided an estimated blue box target on the 8-minute GDX and GLD charts attached. And, once we have confirmation that all 5 waves have completed, and the 2nd wave has begun, we can start setting more accurate targets for the 2nd wave retracement.

I now want you to take a peek at the daily chart on the GDX, as it is presenting an almost picture perfect technical picture. We broke out from a downtrend channel created in the drop off the September 2017 high, and came back to test that break out in the 4th wave, which we recently completed. My expectation is that we may see one more test of the top of the channel in wave (2) before the market can break out.

I also want to note that if we see a direct move through the 25.25 region in the GDX, that would suggest that we may have already begun the 3rd wave rally we have been expecting. Again, this is NOT my expectation at this time, as I still believe we will see an appropriate 2nd wave pullback. But, when you look at how ready the GLD chart is to simply explode higher, you need to at least be aware of this potential, especially with the market now providing us with 5 waves up off the December lows. Yet, since the market has been acting in a rather textbook manner for this 5 wave structure off the December lows, I am expecting it to continue to act in a textbook fashion, and begin a 2nd wave pullback in the coming week or two.

Again, we have been in this posture several times in 2017. So, while I have turned more bullish on these charts now that we have completed 5 waves up off the December 2017 lows, I want to remind you what our break-out trigger will be. After completing 5 waves up for this first wave, we still need to see a corrective 3 wave pullback which holds noted support. After the 2nd wave completes, we need to see an impulsive break out over the top of this 5 wave structure off the December 2017 lows, and that will signal that a potentially parabolic rally in the metals has likely begun. Once that occurs, I will note the support levels at which to place your stops, and then tell you to simply stand back and let the market run.

So, for now, we still have to have a little more patience, and not to get too emotional when you begin to see red in the metals complex in the coming weeks. It could be the last time you see any significant “red” in this complex for months to come.

And, lastly, I want to add a note which I point out quite often. There is something else you should have learned from the recent metals action. The next time someone tells you that the metals are up “because” the market is down, simply put them on permanent ignore, because they know nothing about metals. As we have seen since December, both the metals and the equity market have rallied quite nicely in lockstep.

See charts illustrating the wave counts on the GDX, GLD, Silver.

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.

© 2018 Copyright Avi Gilburt - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in