There Are Still Pitfalls To Watch Out For In The Metals Complex
In this post by Avi he is bring up some more bearish possibilities around an overall bullish outlook. He has been bullish on the overall metals complex recently but when dissecting his timelines we see that the metals could be in for a pullback – which would be healthy in the longer term.
Avi does provide some precise targets but I like to look at his timeline and compare to what I am seeing in the charts. Overall his comment that the sector will “likely continue to test our patience until wave 3 of iii takes hold later this year.” says it all. A choppy market until the tail end of the year has been our thinking as well.
Have a read over the levels he is watching and if you are a trader there is money to be made in a choppy market.
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by Avi Gilburt, ElliottWaveTrader.net
There is no question that the meandering of the metals complex in 2017 has tested many investor’s patience. But, a market does not scream out to the entire complex that it is about to embark upon a parabolic run. So, it will likely continue to test our patience until wave 3 of iii takes hold later this year.
This past weekend, the GDX followed through rather well in providing us what counts best as a 5 wave structure off the March lows. And, I have noted many times that as long as 5 wave structures off lows continue to develop in this complex, I have to maintain an immediate bullish stance.
However, that being said, silver is a little concerning to me right now. You see, if silver continues along its current path, without a pullback, directly to the 18 region, that can be considered a 3 wave structure, right into an a=c target. If it drops strongly from there and breaks below the 17.65 region (.618 extension of the current rally), it would suggest this recent action has all been corrective, and a drop to the 16.30 region would become quite likely. How that drop develops will provide clues as to whether 16.30 will hold as support.
The same applies to the GLD. If we continue higher to the 120.40 region, and then turn back down strongly below 118, that would also sway me into thinking this rally is corrective, and we can head back down to the 113/114 region.
So, my ideal path for the complex would be to see a corrective pullback across the entire complex. I would prefer to see silver, the GLD and GDX all pullback correctively over the next week for a 2nd wave. But, if no pullback should be seen, and GDX takes out last week’s high before seeing a more defined corrective pullback, then we have to watch how silver handles the 18 region, and how GLD handles the 120.40 region.
Ideally, as long as the GDX continues to drop correctively, and maintains over the 21.50-22 region in the pullback, then I can maintain my strong bullish bias.
I am going to reiterate my constant perspective in this complex: As long as we continue to develop 5 wave structures off lows, then I will maintain an immediate bullish bias. But, since I don’t like to go through life wearing blinders, as doing so can often lead to quite painful results, I am going to maintain an eye towards the pitfalls outlined herein over the coming week.
Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.
Sorry to disagree Chris but I think Avi is pretty a pretty good technician. We don’t agree all the time but he sticks to his charts and is an honest guy.
Why people still think this loser can trade is beyond me.