Precious Metals Complex Bottom

Since there is so much information to show you on Silver, Gold and the GDX I’m going to break it down into 3 parts so you can better understand what the charts are strongly suggesting.

Silver part 1:

After an eight month correction in the PM complex I’m going on record to say the bottom is in. I know it is a bold statement but everything I see from a Chartology perspective is strongly suggesting the new impulse move up has begun. I don’t make these kinds of predictions often because of the impact it can have on ones portfolio if I’m wrong.

Bullion, Silver, Bars, Silver Bars, Metal, Old, Gray

Image Source: Pixabay

I’ve been cautiously optimistic since the middle of April 2021 when we began the accumulation process of putting together the PM Stock Trades Portfolio. You never know for certain when you put on a big trade like this if you are making the right decision or not. It is only when you look back in hindsight that you know for certain that what you were seeing is actually correct.

The more time that passes without getting stopped out of your trades the more confident one can get. Usually if your low risk entry point fails to hold support you get stopped out of your trade and you go back to the drawing board. On the other hand the longer the trade can stay solvent that means nothing is broken in regards to your original thesis. The stock has either traded sideways or has moved higher leaving your original sell/stop still in place which is the key to a successful trade, not getting stopped out on the front end.

I mentioned a week or two ago that when this correction was over that we would see a change of character which will be pretty evident. Instead of seeing chopping action going nowhere fast, big up days followed by big down days during the consolidation phase, the stock will start to move up in a more pronounced way with bigger up days followed by smaller down days.

Some of you may remember when the correction began in August of 2020 I said the easy part was over, the impulse move from the March 2020 low to the August 2020 high, and now the hard part begins. The PM complex just experienced an 8 month correction that did its job of putting doubt in investors minds as to the validity of the bull market. Also the type of consolidation pattern many of the PM stock indexes and PM stocks built, a bullish expanding falling wedge, is one of that harder consolidation patterns to recognize early on in real time as the stock keeps making lower lows and lower highs. On the positive side when you do spot a bullish expanding falling wedge that is generally a very bullish pattern. The reason being, as each successive lower low stops out more investors there comes a point when there are no bears left and only buyers. Knowing that you are in a bull market the odds are extremely high the bulls will win the battles and eventually the war.

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