At this point in time, it is quite clear that the metals are testing support. As specifically noted about silver, the 14.60 support region is what I want to see holding as support here. While I can accept a spike and reversal of that level, a sustained break of that level opens the door to a 13 handle for a lower low bottoming in that chart.

As far as GLD is, the 119 region is the similar support region I want to see hold for a wave iv. And, in GDX, you can see we are now approaching the bottom of our support box as well.

The one point I can add to the GDX is that since it I am counting it as a potential leading diagonal, it would seem that it is attempting to provide us the overlap in waves iv and i which is common in diagonals. That could explain the depth of this pullback. But, I also want to note that this is why I have problem relying on leading diagonals since they act like corrective structures until completed.

The other point to make about silver is that we see the 144-minute MACD still holding its positive divergences. And, should it continue to hold that positive divergence, the reversal we see off divergences this extreme is usually quite powerful.

In summary, the metals are now pushing on all the respective supports and how they handle this posture in the coming week will be key in determining whether we see a completed 5-wave structure in GDX and GLD in a more ideal sense, or if we will get a much deeper pullback in the coming weeks, which should also put us on alert for the larger degree yellow alternative count as presented on the daily GLD chart.

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

Avi Gilburt has launched a new site called FATRADER.com, a live forum hosted by a team of top fundamental analysts aiming to showcase research and elevate discussion in areas of the market like biotech, commodities, and sustainable investing where fundamental and macro analysis is critical.

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