The Next Pullback Will Likely Be It

February 7, 2020
Elliot Wave Technical Analyst & author @ Elliott Wave Trader

Originally published on Sat Feb 1 for members of  Believe me when I tell you that I so want to be uber-bullish the metals at this time based upon the larger degree structure, especially in silver.  However, I have to also outline the micro structures, and I simply do not have a clearly completed micro structure in gold.  Whereas silver has certainly provided us with the minimum number of waves to consider its wave [2] as completed, and GDX has ALMOST reached the minimum target I wanted to see, GLD has not even come close to providing us with a clear and clean 2nd wave pullback.

But, despite my feelings regarding the micro structure, I simply cannot ignore the larger degree structures if we begin to break out over the coming weeks.  In fact, experience has taught me that when the bull market in precious metals takes hold in earnest, pullbacks can be and are often quite shallow.   And, this is what causes the “chasing” of price we often see in metals in 3rd waves, and especially in 5th waves.

With silver providing us with all of the wave [2] pullback we may see, and now about to complete 5 waves up (needing a micro spike higher to complete the 5th of 5th in wave i), I have gone on high alert for a bullish break out. 

As I have outlined many times before, once this wave i in silver completes, and the market provides us with a wave ii corrective pullback, the break out over the high of wave i is the break out for which I have been waiting, with a continuation over the 19 region pointing us to the 21.70 region and probably quite quickly.  This will likely be a very strong bullish indication for the metals market as a whole.

In the meantime, I have highlighted over the last week that the 29.20 resistance was the level I was watching in the GDX.  And, that level was tested many times over the last several days.

For now, I am viewing the rally off the 28.20 region as a b-wave in a w-x-y wave [ii] structure.  That would suggest we can still see a c-wave lower to complete this wave [ii] pullback into an ideal target of the 27-27.60 region.  But, a direct break out over the resistance noted on my 8-minute chart would force me to turn bullish sooner rather than later.

In the larger degree structure outline on the daily GDX chart, I want to note that should we see a break out over the market pivot, then long term stops should be placed at the bottom of the pivot.  For once we break out over that resistance, a break back down below it could signal the more bearish case scenario we have discussed in the past.  So, while I am currently a metals bull, I am not going to be a foolish or blind metals bull.

As far as the GLD is concerned, I would still ideally want to see a c-wave down to complete this 2nd wave structure.  However, if we see continued strength in this chart too, which takes us through the b-wave resistance, I will have to assume wave 2 is done with the small pullback which has already been seen.  In fact, if we are going to see more weakness in the metals complex, I think GLD may outperform to the downside to “catch-up” in its pullback structure.  But, minimally, I still would prefer to see the 144 region for a [c] wave of wave 2.

The last point I want to address is all the posts I am seeing about a larger degree bearish pattern.  I have addressed this in the past in detail, but want to conclude with a note about it to remind you of my perspective.  While it is certainly “possible” that the metals market resolves in a bearish fashion, there is nothing on the chart which evidences this possibility at this time.  The market is maintaining a strong bullish structure, and all support levels have been respected on its higher.  Until we see some evidence of a bearish potential, there is nothing yet to be concerned about.  Should we see more evidence of a potential bearish resolution of this rally, I will certainly provide notification to our membership.

See charts illustrating Avi's wave counts on GDX, GLD & Silver.


Avi Gilburt is a widely followed Elliott Wave technical analyst and author of, a live Trading Room featuring his intraday market analysis (including emini S&P500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education. You can contact Avi at:

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