Last weekend, I left you with the following preferred perspective (per Elliott Wave Theory) for the metals:
In looking at the SPDR Gold Shares (NYSEARCA:GLD), I am leaning to this being just the a-wave of iv, since it would seem that GLD would need to come down lower than it already has. In fact, ideally, I really wanted to see GLD come down to the 131/132 region for this wave iv, so it still has a big lower to reach before I would think that the wave iv has completed. That would likely take the Mini Silver Futures Contract to my ideal target region of 22.25-22.95.
As for my targets for the wave v, it still remains in the 26-27 region in silver, and the 138.50-142 region in GLD. We should be able to develop a better target once we see wave v in progress.
So, right now, there is not much more that I am able to add since the market seems to be following through quite well. However, I am going to reduce the topping region target down toward the 25-26.40 region, as it would not shock me to see silver create a double top, as it does so often, which would likely coincide with the 138.50 region GLD, as that is where a=c in GLD.
But, I do want to note that a break down below the lows we hit last week would make me much more immediately bearish at this time, and move me into the alternative counts that the metals have topped in their respecting fourth waves. This would be confirmed with a breakdown in GLD below 130 and in silver below 22.25.
Once we top and begin the confirmed decline, I will then explore the potential that we have a 5-wave structure in silver off the lows, but it is almost impossible to come to the same conclusion in GLD. But, for those with a longer-term horizon, I believe that the next decline is a buying opportunity.
See charts illustrating wave counts on silver and gold here
Editor's note: Avi Gilburt is author of ElliottWaveTrader.net, a live trading room and member forum focusing on Elliott Wave market analysis. Avi emphasizes a comprehensive reading of charts and wave counts that is free of personal bias or predisposition. His Elliott Wave analysis appears frequently on several financial news sites.