Metals:
Expectation Of An Imminent Rally
By Avi
With the market completing what seemed to be 5 waves up off the recent lows, and now seemingly completing a c-wave in a 2nd wave pullback, it leaves me to the expectation that we should see an imminent rally.
Although many turned a bit too bullish at the recent high from which we pulled back, I was still waiting for the market to provide us with an appropriate pullback to set up the next major rally. And, not only have we seen a c-wave drop, but it seems to be quite deep and targeting the .764 retracement of the initial 5 wave rally.
But, the 5-waves down in the c-wave seem to be just about complete. That leads me to the expectation for a turn back up, which should be a 5-wave rally to begin the 3rd wave of the next rally structure. As I have been saying, it is the next 5-wave rally which will put us on “break-out-alert” for an impending 3rd wave rally. And, that is when I become interested in trading this market aggressively to the long side.
I want to also take a moment to note that there is still some potential that a micro lower low can be seen, as the action in GDX and GDXJ may only be considered the 4th wave in the 5-wave of the c-wave. But, should we see the GDX impulsively rally through the 31.05 region, then it becomes quite likely that the c-wave has completed and the next 5-wave rally has begun.
So, I am going to leave this update general in nature, with a potential that we can see one more micro lower low. But, once we move through 31.05 in GDX, I am looking for the next rally to begin in earnest, and provide us with our break-out set up over the coming weeks. That is the setup for which I have been waiting to turn aggressively bullish in the complex.
