GDX, IWM, XLE updates 08/28

GDX: For those who follow me on TWTR, you know I was looking for $23.50 to break and hold to allow for more upside. Today it finally did break and hold, which is appropriate as I was planning on an update already 🙂 The price action confirms the count I already posted in the prior GDX update and I’ve only changed it to i/a, ii/b as commodities often move in abc’s and not 1,2,3,4,5s; though the internal a- and c-waves can be 5-wave sequences. So we’ll just let the market decide what it wants. For now we have to look up: price is at the upper bollinger band and the bands are expanding: price has strength. It did reach the c=a target, but given the chart setup I don’t think that extension will be important. Next up are the 1.382-1.618x extensions, and especially the latter which targets $25.37. That’s also exactly the (red) intermediate-a 61.8% extension off intermediate-b; an ideal target for minor-a of intermediate-c IMHO. It also coincides with prior S/R. My first target for major-c of Primary B remains $32.50: the 1.618x extension of intermediate-a from intermediate-b; and so far nothing has changed my POV and only further bolstered it. My 2nd target is $38ish, where major-c = a. A break below the 200d SMA from here on out will force me to change my POV radically, but for now I don’t see this happening as the charts are all pointing up.

GDX

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IWM: Is the ETF that tracks the RUSSELL2000, and as you may recall I have that index in major-4 of primary V; alternatively one degree lower: intermediate-iv of major-5 of Primary III (please see my big picture counts for the S&P500, which track the same two counts).  The IWM should ideally now be in intermediate-iv of major-5 of Primary-III/C. Why the C? Because you never know beforehand if an advance will turn into 3 or 5 waves. So as to remain objective, we label it as III/C. That’s also why big money often sells most at the 3rd wave; just to make sure… This also suggests the most bullish count is underway, but we’ll deal with it when we get there. For now, IWM is correction and should find support at around $132-$134.

IWM

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XLE: It’s been a while since I posted an update on XLE, but not too much has changed, other that price kept on declining as forecasted But, when re-assessing the chart and noticing that price is at critical Fib-retraces (more about that later) I found some re-labeling of the recent price action (since blue Primary-A) may be warranted. I had labelled the December 2016 top originally as Primary B, and Primary C now underway. And while that can still be correct. I don’t get good Fib-extension overlap on the Primary-wave level with the prior major waves. Hence, the alternative I am presenting today is that Primary B is subdividing into a major-a, b, and c-wave (yellow “a?”, “b?”. With major-b about to complete (the 62% retrace is at ~$60.90).

XLE

How do we know if this new count is operative? A first sign will be a break back above late-July high off $67; as then the pattern of lower lows and lower highs has been broken. A 2nd confirming sign will be a move back above the 200d SMA  (not shown here, but now at $68.91 and dropping). A break below $58 will IMHO not be a good sign and will continue to suggest that Primary B was all she wrote in December last year.