Silver, GDX, and CDNX Wave Counts Point to Higher Levels, Captain Ewave Says
Key Takeaways
- •Silver's primary Elliott Wave count treats wave iv as complete at the 54.77 low following the 121.67 peak, implying the market is now rising in wave v, while alternate counts allow for an unfinished wave iii targeting the $275-300 area.
- •The author recommends and holds long positions in PSLV:TSX, the Sprott Physical Silver Trust, and silver futures, using put options as stops.
- •GDX is advancing in wave (v) within wave iii of an incomplete wave C impulse after breaking above the downtrend line connecting 98.72 and 89.98, with wave (iv) completed at the 69.75 low.
- •CDNX has completed a triple-three wave -ii- correction at the 506.65 low and is rallying in wave (iii) toward an initial Fibonacci-projected endpoint of 1924.51, while the author remains flat with no active position.
- •The projections throughout the analysis rely on Fibonacci relationships, including 1.618 extensions for third waves and anticipated 50%-61.8% retracements for second-wave corrections in both GDX and CDNX.
Silver, GDX, and CDNX: Waves In Play
Captain Ewave
The three charts below span the precious-metals complex — silver itself, the senior gold miners tracked by GDX, and the junior resource issuers of Canada’s CDNX index. The counts are worked in Elliott Wave fashion, the technical framework Ralph Nelson Elliott developed in the 1930s, which holds that markets advance in five-wave impulse patterns and correct in three-wave structures; it is also why Fibonacci relationships such as 1.618 extension multiples and 50%–61.8% retracement zones recur throughout the analysis. Practitioners conventionally carry a primary count alongside alternates, with the anchoring lows and highs of each scenario serving as the reference points that would eventually confirm or invalidate one reading over another. The trading recommendations and active positions listed in each section are the author’s own, consistent with his stated practice of taking the main trades himself.
Silver
The Captain’s daily silver chart.
Analysis
Wave iii ended at 121.67, and the current working assumption is that all of wave iv is complete at the 54.77 low. The internal wave structure is outlined as follows:
- (a) = 78.93
- (b) = 92.23
- (c) = 64.09
- (x) = 96.44
- (a) = 60.99
- (b) = 89.39
- (c) = 54.77, completing all of wave iv
Under this count, silver should now be moving higher in wave v, and within wave v it is still rallying in wave -i- of (i).
The alternate view is that only wave (a) of iv was completed at the 54.77 low, in which case the market would be moving higher in wave (b). Wave iv could still develop into a bullish triangle, flat, or irregular correction.
Because the wave iv correction is relatively deep, it could also indicate that wave iii is still in progress. Under that alternate count, the structure would be:
- 121.67
- 54.77
- rally underway
If that alternate count is correct, then wave iii is heading toward the $275/300 area.
In practice, it is how price behaves at the anchoring 54.77 low that separates the primary reading — wave iv complete — from the alternates that treat it as wave (a) of a still-developing correction or as part of an unfinished wave iii.
The vehicle named in the recommendation, PSLV:TSX, is the Sprott Physical Silver Trust, a Toronto-listed trust backed by physical silver bullion rather than mining equities.
Trading Recommendation: Go long PSLV:TSX and silver futures with puts as stops.
Active Positions: Long PSLV:TSX and silver futures with puts as stops.
GDX
The Captain’s 60-minute GDX chart.
GDX is the VanEck Gold Miners ETF, a widely held fund of senior gold-mining companies; mining equities of this kind are tracked alongside the metal itself because producers’ margins respond to bullion prices. The 60-minute timeframe used here is what resolves the intraday subdivisions of the advance.
Analysis
Within wave C, the market is advancing in an incomplete impulse pattern and continues to move higher in wave iii. Inside wave iii, wave (iii) was completed at the 117.43 high, and all of wave (iv) was completed at the 69.75 low.
The market has also broken above the red downtrend line connecting 98.72 and 89.98, and is now moving higher in wave (v). Within wave (v), price is still advancing in wave .i. of -i-.
After wave .i. ends, a wave .ii. correction is expected to retrace between 50% and 61.8% of the entire wave .i. rally.
The other possibility is that only wave -a- of (iv) ended at the 69.75 low, in which case the market is now moving higher in wave -b-. A more complex wave (iv) could still take the form of a flat, irregular, or even bullish triangle if only wave -a- ended at the 71.90 low.
CDNX
The Captain’s daily CDNX chart.
CDNX is the S&P/TSX Venture Composite Index, the benchmark for Canada’s TSX Venture Exchange, where many junior mining and exploration companies list — the group the author refers to as the junior miners.
Analysis
The long wave -ii- correction is described as a triple three wave pattern and is complete at the 506.65 low. The market is now rallying in wave -iii-, which has an initial projected endpoint of:
-iii- = 1.618-i- = 1773.38
Within wave -iii-, wave (i) was completed at the 1177.24 high, and the working assumption is that all of wave (ii) is complete at the 839.44 low.
The market should now be moving higher in wave (iii), which has an initial projected endpoint of:
- 1.618(i) = 1924.51
Both projections apply the 1.618 extension, the multiple Elliott analysts conventionally assign to third waves.
Within wave (iii), the market is still moving higher in wave $i$. After wave $i$ ends, a wave $ii$ correction is expected to retrace between 50% and 61.8% of the entire wave $i$ rally.
The next major resistance is the red downtrend line connecting 1177.21 and 1037.25, which the market is challenging and attempting to break through now.
Trading Recommendation: Flat.
Active Positions: Flat, although the junior miner wave counts are favored while the focus remains on the senior miners for now.
Active Positions: Flat.
Thanks,
Captain Ewave & Crew
About the author
Captain Ewave
Engineered for excellence, this site focuses on practical Elliott Wave analysis of major asset classes for investors in the gold community.
A trading service is also offered for short-term swings. All Ewave analysis is performed by a professional engineer who consults to a major energy company.
All site postings and emails are edited professionally.
The wave counts and trades come from Captain Ewave himself. The Captain is Gary Kalynchuk, the son of a hardworking postman and a family man. He is also a dedicated family man himself, as shown in the picture above of him fighting a bush fire in his neighbourhood with his two sons.
Gary is a professional engineer who built a 400-employee engineering company from scratch. He now sits on the board of many public companies.
His greatest passion is Elliott Wave analysis aimed at producing winning calls for subscribers. He takes the main trades himself because they make money. This is not just theoretical Ewave analysis; the focus is on making money consistently, with professional-style risk management.
There is always a major difference between predicting market direction and making money in that market, and the Captain says he does what it takes to deliver results.
