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
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

Is It Time To Prepare For The Precious Metals To Get Whacked?

Commodities / Gold & Silver 2019 Jan 11, 2019 - 12:06 PM GMT

By: Avi_Gilburt

Commodities

This article was originally published on Sun Jan 6 for members of ElliottWaveTrader: Over the last several weeks, I have seen those that were absolutely certain back in September and October that gold was going to drop below $1,000 now turn into major bulls in the metals complex. The silver rally especially has gotten the attention of many metal’s traders, and has everyone now all bulled up for a major break out in the complex.

It really is amazing to watch how price extremes dictate the manner in which investor’s views are driven about a market. Yet, as Roy Prassad, one of our more astute members at Elliottwavetrader.net, noted: “the goal of Elliott Wave is to analyze sentiment, not participate in it.”


So, just as we were looking for bottoming back in September when most were extremely bearish and calling for the certain drop in gold below $1,000, I am now looking for topping in the coming weeks. And, GDX is my clearest guide.

If one zooms out on the daily chart, you will clearly see that the rally off the September low into the October high was 3 waves up, followed by a corrective 3-wave pullback. After that 3-wave pullback completed, we then proceeded to rally up in 5 waves, for which we seem to now be approaching completion. To me, this is a classic a-b-c corrective rally. Moreover, this a-b-c rally has taken us right into our resistance target between 21.50-22.30.

As I said earlier, this is the clearest guide I have in the complex, and the main reason I am still looking for one more bout of weakness in the coming months which can point us down to the 16-17 region for a 5th wave in this c-wave down. Should we break out through the 22.30 region, I would have to reconsider my perspective, and view the potential of a leading diagonal off the recent lows. But, as long as we remain within our resistance region, it provides us with a well-defined zone in which we can maintain a strong short-term bearish bias.

As far as silver is concerned, I have been patiently waiting for it to move into its accelerated trend channel for a 3rd wave off the lows, and for weeks, it had been disappointing me. But, we have finally seen that move I had wanted to see, and it even went a bit further than my initial expectations. However, now I think we have just about completed its 3rd wave off the lows, and, as you can see, I have adopted the primary count that the next pullback will be a 4th wave, to be followed by a 5th wave in the coming month or two to complete 5 waves up off the recent lows.

As you may remember, I kept noting that silver really had a very full pattern to the downside when we were looking for that bottom back in November, but I needed to see a solid 5 wave structure develop off those lows to really solidify a bottom in the chart. Thus far, this best counts as 3 waves up.

So, I am sure many of you are asking yourselves how I can expect a big decline to begin shortly in GDX but still see silver provide us with a 4-5 to complete 5 waves up off the lows? For those that have experience in the metals market, you would know that different charts top at different times. For example, if you look back to 2011, silver topped well before gold topped, and when gold entered its final rally, silver only saw a b-wave rally in its larger degree correction. In our current case, I can easily see silver pullback in a 4th wave while GDX drops in an a-wave of its final 5th wave lower. (Remember that we are tracking this c-wave in the GDX as an ending diagonal, which means that the 5th wave lower will be an a-b-c structure). That would then give us a 5th wave rally in silver while GDX only sees a b-wave rally in its final 5th wave decline.

As far as GLD is concerned, I have to admit that this rally is much higher than I would have expected for a 4thwave rally. But, amazingly, it still counts best as a 4th wave rally, similar to GDX. But, I think it is much less clear in GLD as it can just as easily be a leading diagonal for wave (i) off the lows. So, based upon the overall of wave 4 into wave 1 territory, I am not as confident as I was a few months ago that this is a 4th wave rally. In either case, I would still expect a deep retrace for a wave (ii), with the potential still remaining of a drop to the 105-109 region for a 5th wave lower. But, as I noted, I am not as confident in this perspective at this time.

When we look at the correction since we topped back in August of 2016, it has now taken us two and a half years, and I still think we see one more bout of weakness before this wave ii is done. That is truly an amazing structure to consider. This market has done everything it possibly can to shake investors out of the bullish feelings they maintained back in the summer of 2016 into a sense of indifference to even utter despondency. And, I believe a drop to the 16-17 region will cause the rest of them to throw in the towel, assuming that they are still holding one.

But, I will be viewing that drop as a buying opportunity almost akin to the one we highlighted back in the last quarter of 2015. So, I would suggest you make your plans now, because I will guarantee that the bearish sentiment which will grip the market when GDX is in the 16-17 region will strike too much fear in the average investor to be able to pull that trigger on the long side when the time comes. This is what sets the successful investor apart from the average investor.

As Ben Franklin wisely noted:

“By failing to prepare, you are preparing to fail.”

See charts illustrating the wave counts on GLD, GDX, YI & NEM.

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.

© 2019 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