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Avi is founder of ElliottWaveTrader.net, a live trading room and member forum focusing on Elliott Wave market analysis. Avi emphasizes a comprehensive reading of charts and wave counts that is free of personal bias or predisposition. A lawyer and ... more

Metals Bottoming In The Upcoming Week?

Date: Tuesday, May 9, 2017 8:07 PM EST

By Avi Gilburt, ElliottWaveTrader.net

First published on Saturday May 6 for members of ElliottWaveTrader.net Last week, I noted that we still likely have lower levels to strike in this complex, but that I expect the market to set up a bottom very soon.  I still maintain that expectation as I write this.

In my last weekend update, I noted that we still needed to complete waves 3, 4 and 5 in this (c) wave of wave (2) in the GDX.   We now have the minimal number of waves in place to the downside to consider it complete.   However, we did not strike our ideal target of 20.31, where (a) would equal (c), nor did we see a full 5 waves up off the lows we struck this past week.   So, since we do not have any confirmation that a bottom has, in fact, been struck, it leaves the door open for the market to still strike our target.

The GLD has now dropped below our “ideal” support in the 117 region, however, this seems to be quite typical of the manner in which the market has reacted since we hit the bottom to the market back in 2015.  My theory is that the market is conditioning traders to “expect” deep retracements in the early stages of the bull market, which will cause them to chase when the market returns to its normal modus operandi of providing only shallow retracements in the upcoming strong rally.  But, I digress.  I have nothing I see on the chart that strongly suggests that the GLD has bottomed, and it still can drop towards the low to mid 115 region in the upcoming week before a bottom is seen.  A continued move through the 118 region would cause me to rethink this potential.

As far as the GLD is concerned, I want to note that should the market be able to strongly exceed its April high, along with the daily MACD providing a break out signal through its downtrend line, it portends a very strong rally that can take us rapidly up towards the 138 region, if not even exceed it. 

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