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GLD May be Ready to Soar

10/04/2019 9:16 am EST

Focus: COMMODITIES

Avi Gilburt, Esq

Founder, ElliottWaveTrader.net

While the wave structure of the gold market has been confusing, gold appears ready to breakout, reports Avi Gilburt.

With the various charts we track unable to complete 5 waves up in gold off the low struck three weeks ago, it would seem that we can count all of those charts as having just completed a corrective rally top, with more pullback likely.

But the current action now leads me to a much more simple and elegant resolution to the structure we have been tracking for a number of months.

I am starting to see more and more alignment that this pullback is actually a 2nd wave in many charts rather than a 4th wave.  While there is a reasonable interpretation for this being a 4th wave in a diagonal off the lows struck in 2018, I count this primarily as a 2nd wave, which aligns with my more bullish stance in the metals complex.  Take my bullish interpretation in the metals complex into account when managing your own positions.

metals

In the most aggressive posture, last week’s pullback can already be heading down in the c-wave of wave (ii).  However, as presented by the alternative in yellow, we may still see a rally which can extend the b-wave within the wave (ii) structure.

What I like most about this count now is that it aligns all the charts that I was struggling with over the last several months. As an example, if you look at the daily GDX chart (above), this now lines up with appropriate targets for a 3rd wave, and all the sub-waves now line up as they should within our Fibonacci pinball structure.  This count is much more elegant and aligns quite well with many of the underlying charts.

Yet, despite my adoption of more aggressive counts in other charts, I am going to maintain my count as before in the GLD. If the price of gold continues to follow my prior expectation, it would suggest that GLD may lag and may not see the type of acceleration we can see in the other products we track. 

And, if I am correct, then the next break out in the complex should be a breathtakingly strong move to the upside and should begin over the next few months.  However, please maintain some patience. Last week’s pullback  appears to have bottomed on Tuesday. With the pullback structure apparently complete, expect our next 1-2 structure to the upside, which could forecast a very strong rally that will likely be more akin to what was seen in 2016.  Stay tuned.

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.

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