The metal’s price action during the first half of 2017 has certainly
done its job. Whether it be the rally which kicked the year off, or the
one in March, or the one in May, each of these rallies saw a pullback
and did not reach escape velocity. So, each time the market rallied and
fell back, it conditioned traders and market participants to be looking
for a failure again when the rally began off the July lows.
So, the fact that the metals complex followed through on a break out this time caused many to look upon the market with a certain amount of disbelief. But, as long as support continued to hold, this break out was inevitable, as we have been suggesting.
And each time the metals or miners spike higher, we see people attempting to short them. we see people expecting the next shoe to drop, and for this to imminently fail. So, yes, the price action in the first half of the year has created many a doubting Thomas in this complex. And, this is exactly what we need to see until there is a recognition that there are no more shoes that are going to drop, and then the major chasing will begin.
But, as we noted over the last week, it is time to give the metals room to continue to rally. The price pattern, along with the technicals, are still suggesting the market “should” be heading higher before we even see a major test for the bull market.
Now, if you are reading this weekend’s analysis, and are looking for pearls of wisdom from us, then we are going to disappoint you. You see, we cannot offer you anything better than what has already been said by Jesse Livermore, which so appropriately applies to where we now reside in the metals market:
“And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets.
I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine – that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn.
But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”
So, now it is time to simply “sit tight.” All you need to recognize at this time is where the market cannot break below in order to keep the pressure to the upside. And, that is where you set your stops. So, again, right now it is simply time to “sit tight,” and enjoy the ride for which you have been so eagerly waiting all year.
This now brings us to the support levels to watch in the coming week. As long as the GDX holds the 24 region, silver holds the 17.40 region, and GLD holds the 126 region, we will continue to maintain a strong expectation that we still have higher to go over the coming weeks. So, do not worry so much about the micro count. Rather, simply give the market room to run.
But, as we have noted before, over the coming weeks, we will be presented with the next major test of the bull market: Now, let’s move on to the main event, which is presented as the alternative count on the daily GDX chart. Since we have now broken out of the lower consolidation, we are heading higher to test what will be a major turning point in the market.
The greatest probability chance that we see this market has in making a low below that seen in July is presented in yellow. That means that the 28 region is going to be the main event “fight” which will decide if this market has truly begun its long term bullish run or not. We will have further confirmation points along the way even higher, but this one will be the main event for 2017. This is the 2017 title bout.
As we have added a market pivot box to the chart, we want to explain that should the market hit the top of the box – or even break through it – it should NEVER break below the bottom of the box again if the long term bull market has truly begun in earnest. That means that once the 28 region is struck, you can simply place your stops at 25, and not worry.
Either the market will have begun its long term bull market run to currently unimaginable levels in the coming decade, or you will be stopped out, with an opportunity to re-enter the market in the 17 region. But, before we get ahead of ourselves, we am simply preparing you in advance as to what we will be watching once the 28 region is struck or exceeded.
So, let’s all learn to “sit tight” in the coming week, and allow the market to provide us with its smaller degree rallies and pullbacks until we get to the point of the major test we are expecting within the next few weeks in the 28 region in GDX. The only time we will suggest that we may have to act rather than sit tight is if we see a break of the support regions noted above.
So, the fact that the metals complex followed through on a break out this time caused many to look upon the market with a certain amount of disbelief. But, as long as support continued to hold, this break out was inevitable, as we have been suggesting.
And each time the metals or miners spike higher, we see people attempting to short them. we see people expecting the next shoe to drop, and for this to imminently fail. So, yes, the price action in the first half of the year has created many a doubting Thomas in this complex. And, this is exactly what we need to see until there is a recognition that there are no more shoes that are going to drop, and then the major chasing will begin.
But, as we noted over the last week, it is time to give the metals room to continue to rally. The price pattern, along with the technicals, are still suggesting the market “should” be heading higher before we even see a major test for the bull market.
Now, if you are reading this weekend’s analysis, and are looking for pearls of wisdom from us, then we are going to disappoint you. You see, we cannot offer you anything better than what has already been said by Jesse Livermore, which so appropriately applies to where we now reside in the metals market:
“And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets.
I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine – that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn.
But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”
So, now it is time to simply “sit tight.” All you need to recognize at this time is where the market cannot break below in order to keep the pressure to the upside. And, that is where you set your stops. So, again, right now it is simply time to “sit tight,” and enjoy the ride for which you have been so eagerly waiting all year.
This now brings us to the support levels to watch in the coming week. As long as the GDX holds the 24 region, silver holds the 17.40 region, and GLD holds the 126 region, we will continue to maintain a strong expectation that we still have higher to go over the coming weeks. So, do not worry so much about the micro count. Rather, simply give the market room to run.
But, as we have noted before, over the coming weeks, we will be presented with the next major test of the bull market: Now, let’s move on to the main event, which is presented as the alternative count on the daily GDX chart. Since we have now broken out of the lower consolidation, we are heading higher to test what will be a major turning point in the market.
The greatest probability chance that we see this market has in making a low below that seen in July is presented in yellow. That means that the 28 region is going to be the main event “fight” which will decide if this market has truly begun its long term bullish run or not. We will have further confirmation points along the way even higher, but this one will be the main event for 2017. This is the 2017 title bout.
As we have added a market pivot box to the chart, we want to explain that should the market hit the top of the box – or even break through it – it should NEVER break below the bottom of the box again if the long term bull market has truly begun in earnest. That means that once the 28 region is struck, you can simply place your stops at 25, and not worry.
Either the market will have begun its long term bull market run to currently unimaginable levels in the coming decade, or you will be stopped out, with an opportunity to re-enter the market in the 17 region. But, before we get ahead of ourselves, we am simply preparing you in advance as to what we will be watching once the 28 region is struck or exceeded.
So, let’s all learn to “sit tight” in the coming week, and allow the market to provide us with its smaller degree rallies and pullbacks until we get to the point of the major test we are expecting within the next few weeks in the 28 region in GDX. The only time we will suggest that we may have to act rather than sit tight is if we see a break of the support regions noted above.
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