Here is Avi’s recent weekend report that was posted on his site – ElliottWaveTrader.net.

After 4 years of getting trounced, bulls have learned to be quite skeptical and gun shy. This is what a larger degree correction does to the market psyche, as it builds the “wall of worry” for the next bull phase.

In fact, many of the staunchest of bulls over the last 4 years were caught looking lower when the metals bottomed, and, now, have been fighting the current rally, as they are looking for the metals to pullback. I have seen many analysts and market participants note that the metals have “gone too far too fast.” Many have been convinced a pullback is just around the corner since the market is “overbought.” More have been expecting a correction for several months due to the heavily bearish COT reports. And, the latest expectation I heard is that the complex will certainly drop now since the CME has raised margin requirements. It seems everyone is looking for a pullback and everyone has their reasons why it must happen. But, the metals do not often provide investors what they want or expect.

You see, if our wave count is correct, we are now in the heart of a 3rd wave. It means that the market will likely be continuing higher in a manner which will cause some amount of disbelief, even amongst the bulls. So, while most of the market is now looking for a pullback, we may not see more than what we experienced this past week.

Another perspective that has been continually touted for quite some time, and has many looking the wrong way, is the deeply engrained – and incorrect – belief that the equity markets have to collapse in order to see gold rally. Nothing can be further from the truth, as not only have we seen the metals rally alongside the equity markets in 2016, we have seen the metals rally alongside the equity market many times in the past. Anyone who believes the equity market must collapse to send gold higher clearly lacks an understanding of market history. So, while a rally in the dollar, equities and the metals has taken most market participants by surprise, our members at Elliottwavetrader.net were well prepared for this “surprise” action. Clearly, it was no surprise to us as we were expecting this action in all 3 markets.

In fact, I have been warning all those willing to listen to ignore the COT reports, to ignore the rally in the dollar, to ignore the equity market rally as it relates to metals, and to ignore the “overbought” nature of the metals complex. Feel free to read my weekend updates on metals for the last two weeks for the detail on those issues. You see, none of this meant anything to me, as the Elliott Wave set-up suggested that the metals would rally regardless of any of these factors. Right now, it is simply a matter of maintaining support, and looking to our next higher targets. Until a support level breaks, this market will be heading much higher despite the predominant disbelief.

So, as I have been saying all week, as long as the market does not break its current set up by breaking support, GLD is heading to at least the 137 region, silver to at least 22.15, and GDX to at least 33.50 on the next move higher over the next week or two. The market has proven itself as being extremely bullish, and the long term lows for this complex are likely in place, with an approximate 75% probability, in my humble opinion.

At this point in time, the probabilities are clearly with the bulls, and it would take a very large statement by the bears to make me think otherwise. Therefore, I believe that the GLD is on its way to 160-175, silver on its way to 27-29 (with extensions possibly taking it as high as 36-38), and GDX is on its way to 42-46, all potentially to be seen within 2016. And, yes, this is only for wave (1) of the next multi-decade bull market, which seems to have begun. So, while I can certainly be wrong in this expectation, the only thing that will tell me so is price, and price has been telling me to look higher. All other factors should be ignored, as they continue to create the wrong expectations in most market participants. But, has this not been the story for the last 5 years?

See charts illustrating the wave counts on the GDX, GLD and YI at https://www.elliottwavetrader.net/scharts/Charts-on-GDX-GLD-YI-201607101314.html .

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.