The reason I am sending out a mid-week update sooner than normal is because GLD has an important update I needed to highlight.
As of the weekend, the GLD only had 3 waves up off a potential wave iv low, so I said I had no reason to consider it having competed. Today, the GLD is making a higher high which MAY be considered as a leading diagonal for wave 1 of v.
But, I still have to caveat this with the fact that I do not wholeheartedly trust leading diagonals as strong trading cues. Therefore, in order for GLD to prove to me it has completed wave iv, we MUST see a corrective retrace from this rally, followed by a break out over the level at which this potential wave 1 tops out. That would strongly indicate that wave v has likely begun.
Until such time, I remain cautious as the b-wave triangle is still a valid interpretation.
As far as GDX is concerned, we seem to be striking a target for a d-wave in the wave [4] triangle we have been tracking for the better part of the last few weeks. And, in coming this high, I have to now say that the c-wave bottom is the MUST HOLD level to maintain this triangle count. So, as long as we hold over the 39.29 level, I view the next pullback as an e-wave of this triangle. And, right now, resistance is 44-44.50.
As far as silver is concerned, I can consider this rally a 5-wave structure in the same way I see it in GLD. Therefore, the slow struck on the 8th of September is the MUST HOLD level in silver, with a break out over the pivot suggesting we are on our way to the 36+ region.
In summary, the last lows struck in each of this charts on September 8th should be used as a strong stop for anyone trading the shorter term in these charts. As long as we hold over that support, I am looking higher to begin the next rally phase. However, any break down below those levels suggests that this correction has not yet completed, and a c-wave down is a reasonable expectation in each chart, as outlined in all my prior recent updates.
See charts illustrating Avi's wave counts on the GLD, GDX and Silver.
Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets.
This article was originally published Tuesday morning, September 15, for members of ElliottWaveTrader.net:
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