I have said many times before that trying to track every twist and turn within corrective action is like trying to throw Jell-O for distance . . . you just won’t be able to get it all.
While impulsive structures under the Elliott Wave patterns are quite predictable, very often down to the penny, corrective action is quite variable, and nowhere near as predictable. Currently, we are likely within a corrective wave two off the lows in GLD and GDX, and the action is quite difficult.
But, the major issue I am now seeing is that silver is still showing signs that it may be setting up for lower lows. In fact, we have a rather clear 5 wave structure down off the recent highs in silver. While we can consider it as an a-wave in a wave ii or even as a c-wave in an expanded flat in a 4th wave, as long as we remain below the recent highs, and the next rally is corrective, I am looking for silver to drop to the 12-12.75 region to make lower lows. The only way for silver to invalidate this potential is to push to a higher high over the 16.18 level, even by a penny. But, as long as we remain below that level in the near term, I am targeting the 12-12.75 region for a lower low. As the pattern develops, I will lower that invalidation resistance level.
Now, while I can also count the GLD as a 5 wave leading diagonal down, I do not trust leading diagonals as trading cues, as they are not terribly reliable, at least in my humble opinion. But, the alternative leaves me with a completed a-wave bottom, and an expanded b-wave flat still in progress – also not the most reliable of patterns. So, while I think silver has a better than 50% chance at making lower lows, I think GLD only has a 35-40% chance at making lower lows. If we can see a solid impulsive structure develop off Friday’s low, it will give significant weight to the expanded b-wave perspective, rather than a set up to lower lows.