![]() ![]() ![]() | |||
Another Potential Third Wave Set Up In The MakingAvi Gilburt
In Elliott Wave parlance, 3rd waves are the segment of a trend move which provides the strongest market action. This is why we are always on the “lookout” for the set-ups for 3rd waves. Whereas silver has already seen the heart of a 3rd several weeks ago, we now may be setting up for one in the GDX and GLD. Before we came into the past week, the market looked like the downside we have recently experienced was not yet completed, as I noted in the last weekend update:
After the GDX saw further downside early in the week, as expected, it completed its downside structure with a truncated ending diagonal, which is not the standard way downside structures complete. Yet, the market provided us with a nice 5 wave structure off that low, and the next impulsive structure has been developing since. On Wednesday, after the Fed announcement, the GDX struck its 1.00 extension off the lows, and I sent out the following update, noting the important juncture the market was at:
As I noted many times that day and the next, 29.25 was the support I was looking to hold to maintain the Fibonacci Pinball structure higher. And, on Thursday, the market dropped right down to 29.24, and continued within its impulsive structure higher. So, I do apologize that I was off by one penny. At this point in time, you can see the raised support region presented on the 8 minute GDX chart. As long as we do not break below that support, and ideally remain over the 1.00 extension at 29.87, then I will be looking to complete 5 waves up off the recent low, which I would classify as wave (i) of wave 3 of iii. That suggests that after a corrective wave (ii) pullback is seen, and we then break out over the top of wave (i), the market is well on its way into the heart of its 3rd wave, and targeting the 39-41 region next. Alternatively, a break of the support box before we complete 5 waves up suggests that we can still head down towards the 26 region in a more protracted wave 2, but that is only the alternative at this time. As far as silver is concerned, I would like to see us remain over 19.55 at this point in time, as it, too, seems to be completing a wave I of wave (v) of 3 of iii on its chart. So, yes, silver seems to be a bit ahead in its structure, which is likely the reason it has lagged the GDX recently. But, under all circumstances, as long as silver remains over the 18.80-19 region, I still remain in bullish mode. This brings me to the GLD. And, to be brutally honest, I do not have a pattern I am confident in regarding its structure off the June low. However, I am going to use GDX and silver to provide more guidance regarding the complex. Yet, I still need GLD to begin to accelerate higher and take us into the heart of a 3rd wave, as I do in GDX. Therefore, as long as we remain over this past week’s low, I am still going to maintain a minimum 137 target on GLD, with my preference being the 142-145 target region for wave 3 of iii. See chartsillustrating the wave counts on the GDX, GLD and YI. ### Avi Gilburt Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.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. |