Metals

Capital growth concept with growing gold coins and charts

Metals Complex Pushes Us To The Limit

Avi Gilburt
ElliottWaveTrader.net
First published Sat May 7 for members of ElliottWaveTrader.net
For those that understand how metals trade, it is quite clear that they move to extremes. And, the main reason this is so is due to the driver of the metals market being emotionally based. Yes, you heard me right. The driver is not market crashes, or world-wide debt, or inflation, as so many have tried to sell you upon. Rather, emotion is what drives this market, and when you can understand how to track such emotion, you can have a better handle on how it may move. This is the main reason why it often pushes us to the edge of our expectations, and is driven to extreme movements.

This past week, I noted how we were going to begin the week at an extreme, and the complex was on the precipice of either a break down or break out. Our primary expectation was that it was going to break down into a corrective phase, and, thus far, the market has followed through.

But, we are not out of the woods just yet. It is still “possible” that the markets may continue to break out, so let’s go through what we need to look for in the coming week.

Again, the GDX presents us with the cleanest picture of the market, so I will begin there. As noted last weekend, it would take a strong move through the 28 region to signal we are heading to the 40+ region sooner rather than later. But, the GDX turned down right at the top of the market pivot on our daily chart, and seems have begun a corrective retracement. What supports this perspective is that the rally off the low struck on Wednesday this past week began in corrective fashion, was followed by what seems to be a triangle consolidation, with an impulsive (c) wave rally continuing thereafter, all of which I am counting as a b-wave rally.

My preference is to see the GDX maintain below the 25.80 region in the upcoming week, and then drop down below 23, which I will count as the (a) wave in the blue wave ii.

As you can see, the alternative count would suggest that we are already in wave 2 of wave iii, but I will need to see confirmation of that perspective before being able to adopt it. If GDX would be able to strongly exceed the 25.80 region, and then rally through the 26.60 level, that would be an initial indication that this “correction” has completed, and we will be watching the all-important 28 region for cues as to whether we are heading directly to the 40+ region. Again, this is not my primary expectation, but I do have to respect the manner in which the metals move, having much experience in this arena.

As far as GLD, that too seems to be completing its b-wave rally, which may have one more push higher in the coming week before it “should” turn down. As noted last weekend, resistance is between 125-126, with only a strong break out through the 129/30 region suggesting the correction is over and another major leg up is in progress.

Lastly, with regard to silver, I am still in between several potential counts, as you can see from the chart, and which has been outlined over the last several weeks. The 16.90-17.10 region remains support and upside is still open as long as we do not break that support. Should that support break, then we are either in a i-ii, 1-2 structure (blue count), or the outside chance remains for a lower low (red count). And, as I noted before, should we see a break of support, I will discuss the other counts more extensively in a mid-week update.

See charts illustrating the wave counts on the GDX, GLD and YI.

May 11, 2016
Avi Gilburt
website: ElliottWaveTrader.net

Avi Gilburt is a widely followed Elliott Wave technical analyst and author ofElliottWaveTrader.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.

Gold bullion and coins

Captin Ewave Major Markets Update

May 10, 2016

Email: admin@captainewave.com
Website: www.captainewave.com

Gold:

Short Term Update:
For the last few days we have been talking about the two options in gold.
Either all of wave *iii* is complete at the 1306.00 high or just wave !I! of our wave ^v^ thrust is. In yesterday’s trading session, gold was sharply lower, and reached a low of 1261.00.
In the overnight session, gold remained stable and reached a high of 1269.50, at the time that this Post was being written. Short term wave traders grabbed some great profits on the short side, and are hungry for another win, but we need to wait for a bit more wave clarity before placing our next power trade.
If wave *iii* is complete at the 1306.00 low, then we expect the current drop is wave *iv*, and our retracements for the end of wave *iv* are;
23.6% = 1247.10;
38.2% = 1210.70.
It is a bit early to conclude what type of pattern wave *iv* is going to follow, but if we are in wave *iv*, it is NOT complete at 1261.00, as it is much too shallow to be all of wave *iv*.
On the other hand, as we said in an Intraday Post yesterday, while travelling to NYC, gold has now completed the minimum requirements for a completed 3 wave pattern from the 1306.00 high to the 1261.00 low. So if we are still in our wave ^v^ thrust, and it is subdividing then the count would look like:
!I! = 1306.00;
!ii! = 1261.00, if complete, to complete all of wave !ii!
Retracements for wave !ii! are:
50% = 1267.30;
61.8% = 1258.10
Upon completion of wave !ii!, our wave !iii! rally is next.
WE should know in the next 24 to 48 hours which way gold wants to go!
Longer Term Update:
Based on the current count, gold is still working on its first impulsive sequence out of its wave (2) of 3 low, and we still have a little way to before this sequence is complete. We should now be falling in wave *iv*.
Active Trading Positions: Long 20 positions, with puts at 1085.00!

Crude Oil:
Short Term Update:

Crude reached a low of 43.04 in yesterday’s trading session. In the overnight session, crude was higher, reaching 43.98, at the time that this Post was being written.
There is no change to our current analysis as we still see further weakness, as we are still short of our 50% retracement level for all of wave !ii!, which is 42.89.
Upon completion of wave !ii!, we expect a sharp rally in wave !iii! and we will buy crude at 42.50 to try and grab this next leg up.
Our updated count is:
^i^ = 43.69;
^ii^ = 39.00;
^iii^:
!i! = 46.78;
!ii! = 43.03, if complete, but we expect further softness as our retracement levels are:
50% = 42.89;
61.8% = 41.97
Projections for the end of all of wave ^iii^ are:
^iii^ = 1.618^i^ = 52.67;
^iii^ = 2.618^i^ = 61.11
Our first projection for the end of wave *iii* is:
*iii* = 1.618*i* = 61.84.

Suncor made a slightly lower low in yesterday’s trading reaching 25.31. We are still looking for the end of wave .a. of -ii-. Retracement levels for all of wave -ii are:
50% =24.31;
61.8% = 22.98
If wave .a. is ending, then we should expect a wave .b. rally, a shown on the Weekly Suncor Chart, as the next big event.
Long Term Update:
We are now working on the assumption that a major low in wave b of B was reached at the 26.05 low. If this assumption is correct, then crude is now heading sharply higher, at least back to the all-time high of 147.27.
Active Big Wave Positions: Buying at 42.50, risking to 38.99
Short Term Positions: We’re long as of this morning, with a tight stop at $42.90!

S&P500:
Short Term Update:

Not much happened in the S&P in yesterday’s trading, and in the overnight session the S&P Futures are up about 12 points at the time that this Post was being written.
As you can see on the attached 120 Min S&P Chart, we have made a change to our count for wave -iv-. It now could be possible that all of wave -iv- is complete at the 2039.45 low. If that is the case, then we should now be starting wave -v- higher.
It is still difficult to say whether all of wave -iv- is now complete. or whether it will become more complex and even a bullish triangle. If it is becoming a bullish triangle then we just completed the first leg of that triangle at the 2039.4 low.
We should get a better picture tin this week’s trading.
Wave -iv- retracements levels are as follows:
23.6% = 2057.41;
38.2% = 2025.61.
Long Term Update:
Wave -i- of (v) is complete at the 1946.70 high, and wave -ii- at 1891.00. We should now be heading to our second projected target for the end of wave -iii- and once that wave is complete, we should expect drop in wave -iv-.
Our minimum target for the end of wave (v) is the all-time high of 2134.72.
Active Big Wave Trading Positions: Flat.
Short Term: We grabbed a short term long position this morning, risking to 2038!

USDX:
Short Term Update:

The USDX rallied to 94.33 in the overnight session, at the time that this Post was being written.
This rally has now eliminated our latest count and we are unsure of the short term count for this market. We will need to wait for more wave clarity before making a short term waves projection.
Long Term Trading Update:
The longer term picture is clear. It looks like all of wave ii was completed at the 100.71 high and we are now heading sharply lower in wave iii.
Active Trading Positions: Flat.

HUI/GDX and Selected Gold Stocks:
Short Term Update:
AS expected the GDX and our selected gold stocks were sharply lower in yesterday’s trading.
It looks like these markets are following our exact suggested paths, within their respective corrections.
GDX:

As you can see on the 60 Min GDX Chart, it looks like all of wave (b) ended at 25.44, and we are now falling in wave (c) of ii. Our minimum target for all of wave (c) is the wave (a) low of 23.29, but we do have much lower targets with our retracements levels, that are shown in the attached 60 Min GDX Chart. Traders can expect further weakness in the days ahead.
ABX:

As you can see on the 120 Min ABX Chart, wave .b. ended at 18.84, and we are now falling in wave .c. In this market wave .c. has satisfied the minimum requirements for a completed 3 wave drop as we have traded below the wave .a. low of 17.32. We doubt the all of wave (ii) is complete at the current low of 17.32, as we are still above our retracement zone. Expect further weakness here also.
Active Trading Positions: We are long the GDX, ABX, KGC, NEM, CRJ, and TSX:XGD with no stops!
Free Trades Offer For Web Readers: Send me an email to admin@captainewave.com and I’ll send you my next couple short term ewave trades for free!
Thank-you!
Captain Ewave & Crew!
Email: admin@captainewave.com
Website: www.captainewave.com
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