First published on Sunday Oct 29 for members of ElliottWaveTrader.net
There is no doubt that the action we have experienced in the metals complex in 2017 has been exceptionally frustrating, especially as the market presented us with several break out set ups that did not follow through. And, when a larger bullish structure presents you with break out set ups, probabilities suggest you have to favor those set ups, as I did in 2017.
But, the market has simply refused to follow through on each set up, and has caused significant frustration to anyone who has been looking for those break out signals this past year, and especially me. And, even though each bottoming set up we noted in December of 2016, and in March, May and July of 2017 provided a rally that we expected, each rally invalidated the bigger break out set up each time through the year.
In fact, I will probably classify 2017 as one of the most challenging years I have dealt with in the metals complex since I have been providing my analysis to the public. When you consider that I began in 2011, and caught the top of the gold market within $6 of the high struck, and then caught the bottom of the market at the end of 2015, I really find 2017 to have been much more difficult than either of those years, or any of those in between. And, this is despite the fact that we have not even broken a single bottoming point we noted through the year, and still remain over even the July lows.
But, as I have been noting in my updates since we broke upper support in the market over a month ago and invalidated a direct break out, the metals market is in a region of uncertainty. In fact, I have been noting the potential for the GDX to drop down to the 17 region, as ABX was signaling a potential drop down to the 11 region.
As we saw this past week, ABX seems to have begun its run to those lower regions. Yet, both gold and silver have still held their respective support regions. So, for now, it seems the market is a bit bifurcated. While I still want to see how the next rally in the complex takes hold, my expectation remains that it will only be a corrective rally. And, even the ABX should begin a corrective rally within the next week or so.