Metals and miners update

I got stopped out of JDST for a small profit near the open today and then waited for the double bottom to count out, got back in @ $12.12 again in double the size because I think gold is ready to pull back into a B wave.  Fortunately, JDST recovered almost all of its losses into the close and so this time I got paid literally coming and going.  Here is the GLD model that I think is likely in effect.

Looking at the close up, the usual culprits for pull back are the 38.2, the 50 and the 61.8% fib.   Maybe I will get lucky on this one and see a big 61.8% pullback.  That open gap is begging to be filled.

As usual, playing GLD is sleepy.  JDST is where the action is.  I think that something as big as the B wave in GLD should either get JDST up to $15 to fill the gap below (minimum) or more likely $18 which is the level of the prior 4th.  Just the 38.2% fib bounce would be $18.74.  So 50% in just a week or two of holding is a worthwhile bet.  Of course, I already have my stops in at $11.99.  There is some chance that today's move was an a-b-c back to the top of a down-sloping channel so if we don't break out to a higher high quickly when trading starts next week then $12.90 I will probably tighten my stops and take some profit.  But if it does his that lower rail again and hold it then I will add even more to the kitty for the coming bounce. 

Whatever you do, don't get euphoric about GLD during the C of E of $ wave because if it plays out as expected a lower low will occur, perhaps to even as low as the prior 4th wave ($650-$700) before turning back upwards in a meteoric rise to $3000.  Interest rates are now on the rise and lots of people will see that as an attractive investment relative to gold.  They have been taught that their money will work for them (a physical impossibility of course, only people can work) and old ideas die hard. 

One day all of the paper assets will collapse and the only thing worth something will be hard assets.  But until people finally realize that the dollar is worth zero, the dollar price of gold will fluctuate and probably with higher volatility than usual.  I have referred to what is happening as "supernova economy" for many years in emails to family and as far back as this 2011 post in my blog.  Near the end of its life, the star which is going supernova begins to contract and expand violently just before it explodes.  This is why I used the term - I expected and continue to expect increasing volatility in everything - the economy, politics, social mood, you name it.  Greenspan called it "turbulence".  Yeah I bet a supernova can be thought of as turbulent.