GLD update

I think just too many crocs were lined up waiting for gold to put in its 4th wave so they could, with high odds, safely short it.  As a result it is trying to be tricky here but the EW rules only have so much flexibility and options are running out for GLD now.  I think the recent move up was wave 1 of C of E.  Then it came back down hard on anyone who would be a weak hand. In doing so it filled the gap caused by 3 of 1.  Gold now appears to be trading in opposition to the markets.  Gold operates at one wavelength (frequency) and the markets at another.  Sometimes they will be trading in synch and other times in opposition.  Notice how gold has been rallying since the first of August.  Today's gap down occurred at the open as the markets gapped up.  Then gold reversed itself to close still red but near the high of the day.  So the way that the waves are beating together right now, it looks like gold's bullish gap fill is bearish for the broader markets.  We will know on Monday or Tuesday at the very latest.

GDXJ chart is now quite interesting on the log scale with the form of a rising wedge showing up.  The odds are very nice that it will take the red path and pretty nice (not as high) that it will take the blue.  But the REAL beauty here is the built in stops trigger.  Look how wave 1 of 5 of 4 came down to touch the rail at the first blue circle designate as blue 4.  Then it rallied and pulled back right exactly into the rail again, a very nice test of support.  All you have to do is buy this in the pre-market on Monday and set stops below that support line.  It's not guaranteed to be a winning trade because there is no such thing for mortal man.  But the odds are heavily kiltered in your favor on that one.  And since you would be buying very close to the stops, you have little to lose before finding out if your trade went bust and plenty to gain, especially if playing JNUG (last trade:$25.36).

At some point metals and miners will finish this 4th wave and by then JDST ought to have gotten beaten into dust.  As soon as the wave falls back through that top rail on the way down, JDST is a strong buy below that line and a strong sell above it.  The expectation is that gold will plummet about 30% during that 5th wave (making it a very strong buy).  But let's not get too far ahead of ourselves...