GDX: well that didn’t take long to disproof the count I (and many others btw) had for GDX as it made a lower low below the December low, thus taking the a/b or i/ii count off the table. Thus back to the drawing board. As said in my February 8 update: “A break below the recent December low is Bearish and would suggest something else is going on: a much more complex correction. Stops can be placed accordingly.” This shows why stops are important: they help you protect your capital in the case you are betting on the wrong side. Happens to everybody. Now all we can do is re-assess and see where the next opportunity lies. Cont’d below.
I therefore went back to the weekly chart to re-assess the big picture. What I found is:
- the rally during the first half off 2017 still counts best as wave a/1
- the decline during the 2nd half of 2017 still counts best as a corrective (7-waves) decline
- the next rally to $25.59 (a/i) still has only been retraced by 61.80% and found support at the 150w and 200w SMAs, which have flattened out after 5 years of declining. The 50w and 100w SMAs are already moving up out of their lows.
- As long as these two SMAs hold price we can expect higher prices longer term
- The current pattern since early 2017 looks more like corrective consolidation but a break above $25.50 is needed to confirm the anticipated move to mid-30s or higher is underway.
Thus, the best count now is to place red intermediate-b/ii at last week’s low, though it may go a little lower. However, from the weekly chart and daily chart below, it follows that price needs to hold the $21.50 region. If it doesn’t than black major-b is still underway and should seek out $16/$17. Shorter term I am looking for a bounce, but price does need to move >$22 to unlock $24.