Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Are We Ready For A Gold And Silver Rally?

Commodities / Gold and Silver 2017 Dec 05, 2017 - 06:47 PM GMT

By: Avi_Gilburt

Commodities

Many of you who follow my analysis have learned quite well how I look at the market. And, those of you who have read me in the past know that I do not view fundamentals as being relevant to determining when we can see a major turn in the metals market.

In fact, in 2011, the fundamentals for the metals market were exceptionally strong, with most everyone believing in the certainty of gold exceeding the $2,000 mark, just before we began a multi-year pullback.


Moreover, the fundamentals were terribly weak just as we were hitting the bottom in 2015, with most market participants being certain that gold was about to break below $1,000.

So, I get many emails from followers who forward me other articles they think I will find amusing, especially ones that like to highlight the fundamentals. But, this past week, one statement really caught my eye.

At the start of this particular article, the article writer began with the following sentence:

“Too many technical analysts dismiss fundamentals. True, technicals usually lead fundamentals but understanding the fundamental drivers (when it comes to Gold) can give you an edge.”

Again, for those who read me often, I am quite certain you know what I am about to say. In fact, I even posted this sentence in my trading room at Elliottwavetrader, and asked for comments on this sentence. And, these were some of the comments I received:

"Too many people dismiss B. True, A is usually ahead of B but taking into account B can give you an edge." What? If A is usually ahead of B, then B is usually useless. So his statement makes no sense.”

“Reminds me of a good quote from The Complete Turtle Trader: A technical trader (trend follower) is purchasing quantitative information from a Wall Street fundamental analyst and notices that they both have a number of the same positions open. When he queries the fundamental analyst about this, he receives the reply, "That's true because even with all of our good (fundamental) analysis, if we don't put a trend following component in it, it doesn't do very well."

And, there were many others along the lines of the two I just quoted. I think you get the gist of the point. If one really understands that technicals will lead the fundamentals, what use would there be for something that is lagging?

To use that which lags in order to make a decision to put your money to work is akin to using a several month delayed price quote.

But, investors have been so indoctrinated to believe that one must invest based upon fundamentals that we have become no different than the masses who were so certain that the world was flat. In fact, R.N. Elliott noted “[i]n the dark ages, the world was supposed to be flat. We persist in perpetuating similar delusions.”

One has to ask if we really have a skewed view about the importance of fundamentals. I mean, if one recognizes that fundamentals lag technicals, yet place primacy upon fundamentals, are they not simply looking at the market with blinders on? Would you ever drive your car while looking out the back window? Just something to think about.

Price pattern sentiment indications and upcoming expectations

I have not provided you many articles of late regarding my directional bias on the metals. You see, the metals have been within a corrective structure, which has made both bulls and bears feel as though they have been right on different days over the last several months. But, I see nothing more than a consolidation, within a larger consolidation.

So, rather than bore you with the detail I provide to the subscribers of my market services (smile), I want to provide two pieces of information which should provide appropriate guidance to you over the coming months.

First, as long as the GDX remains over the 21 level, we can set up a higher-level consolidation in the coming months before we have another break out set up in the complex. However, should you see a break down of 21, we will not likely strike a long-term bottom until we reach at least the 17-19 region.

Second, I will quote to you one of the things I have written to my members about ABX, right before we saw the downside in the metals this past week:

But, I want to highlight again the significant positive divergences evident on this daily chart. This is the stuff of which major bottoms are struck. So, while I can maintain an “ideal” wave structure still calling for a iii-iv-v to complete in the coming months, I want you to be well aware that when the upside finally gets ignited, the set up is quite similar to expect what we saw in early 2016. So, while my ideal structure still calls for more downside on this chart, as a long-term investor with a horizon of more than a few months, it would be hard to maintain a strong bearish bias when I see divergences like this.

So, yes, I still think it will take us several more months before we are able to resurrect a break-out set up in the complex. But, there are indications that the metals can see a strong rally take hold over the coming weeks. However, my expectation is that any rally seen will only be corrective in nature, and will be followed by an equally strong downside resolution before this larger corrective action has completed.

Moreover, there are still quite a few stocks within the list of miners we follow as part of the work we do for our EWT Miners Portfolio that can still see sizeable downside moves. But, there are also quite a few miners that suggest they are getting quite close to long term bottoms in this corrective pullback which began in August of 2016. In fact, the set up I am now seeing is akin to what I was seeing in the fall of 2015. And, we all know what happened once we turned the calendar into 2016.

See charts illustrating the wave counts on Silver, GDX, GLD & ABX.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.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.

© 2017 Copyright Avi Gilburt - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules