Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18
Will Weak US Dollar Save Gold? - 7th Dec 18
This Is the End of Trump’s Economic Sugar High - 7th Dec 18
US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - 7th Dec 18
The Secret Weapon for Getting America 5G Ready - 7th Dec 18
These Oil Stocks Are a Ticking Time Bomb - 7th Dec 18
How Theresa May Put Britain on the Path Towards BrExit Civil War - 7th Dec 18
How easy is it to find a job in the UK iGaming industry? - 6th Dec 18
Curry's vs Jessops - Buying an Olympus TG-5 Tough Camera - 5th Dec 18
Yield Curve Harbinger of Stock Market Doom - 5th Dec 18
Stock Market Crashed While the Yield Curve Inverted - 5th Dec 18
Global Economic Outlook after Trump-Xi Trade War Timeout - 5th Dec 18
Stock Market Dow Plunge Following Fake US - China Trade War Truce - 5th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

Getting Dangerous To Be A Bear In Metals

Commodities / Metals & Mining Aug 10, 2018 - 12:51 PM GMT

By: Avi_Gilburt

Commodities

First published Sat Aug 4 for members of ElliottWaveTrader.net: As the world-wide population has grown, much concern has been building regarding how we will be able to continually feed this ever-growing population. Since there are only so many resources available, many scientists question our ability to produce enough food to be able to sustain our population.

I think we are getting to the same point regarding the bears in the metals market. What invariably occurs within markets is that the more entrenched a trend becomes, the greater the number of believers in that trend grow. So, as a bull market hits its highs, with the great majority believing the rally will go on forever, there is no one left to continue to buy to push it even higher. That is why bull markets do not end because of selling, but, rather, a lack of buying. There are no more buyers to bring to the market since everyone has been converted into a buyer and those buyers simply run out of money.


The same is true of bear trends. So, as the market reaches its climax in percentage of bearish investors/traders, we simply run out of sellers when we approach the lows. That is why we see waning technicals at the lows (which evidences waning selling), along with positive divergences. The selling simply dries up. So, it seems we will soon be running out of food to sustain the bears, as there are simply too many of them now to feed.

When we begin to see heavy positioning of bearish bets and along with the patterns we follow reaching a minimum completion point, we have to begin to realize it then becomes dangerous to be a bear. And, in the metals market, this is what we saw at the highs in 2011, the lows in 2015, and I think we are approaching that same extreme point in 2018, especially with GLD hitting lower levels this past week for which I have been patiently awaiting.

With the GLD finally hitting that target box to which I have been pointing for weeks now, we have struck the minimum target at which I can expect a bottoming. Yet, when I review silver, ABX, GDX and GLD, I have no structure off the recent bottoms which evidences that a new bullish rally has begun. I just cannot make out any clear 5 wave structure off any bottoming at this time which would make me confident that the bottom has been struck. This leads me to believe that, even though that rubber band seems extremely stretched to the downside and can snap back at any time, I think we may still see another 4-5 before this c-wave completes.

But, that does not mean I would suggest to anyone to be turning bearish. Rather, I think investors (especially long-term investors) have to realize that this is another buying opportunity being presented before you. As you can clearly see on my daily ABX chart, we are within the buy zone I pointed towards in 2017. While we can still see a 4-5 take shape to complete this last segment of downside, and maybe even slightly drop below this buy zone, I still view this region as a great opportunity, especially if one has a perspective on this market which is more than a few weeks.

As I also mentioned in this past week’s mid-week analysis, the market is starting to “feel” similar to the last half of 2015. While another 4-5 would really set up a very nice bottoming structure, it also would likely set up sentiment readings in this complex which would rival that of late 2015, or even worse.

In the upcoming week, I will be on the alert for an impulsive structure pushing much higher in the charts we follow. However, based upon the rally we have seen thus far, I cannot say that this is my expectation at this time. Rather, based upon what I am seeing, along with the rally we experienced on Friday, it still seems like this c-wave of this larger degree 2nd wave we have been tracking has not yet completed. And while we may very well turn out like the bottoming in 2015, which began in an overlapping manner, I am still going to need the market to prove that to me before I am able to turn very bullish in the near to intermediate term.

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

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.

© 2018 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.


© 2005-2018 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