USLV is at an excellent technical buy-in point right now.

The common wisdom right now is that:

• Gold and silver will track pretty closely to each other
• Gold is in a 4th wave triangle, likely headed towards C of E of 4.
• After that, it will collapse down to $1000/oz and silver will hit $15 or lower.

The one thing about conventional wisdom is that if too many people become wise, the wisdom doesn't pan out.  In the case of gold and silver, the expectation is that deflation will eventually collapse their prices down to as low as $700 for gold.  Of course, that is well below the cost of production even for the big, efficient operations.  That does not mean it cannot happen but in a world where fiat currency is running the show you also have to question everything.

Way back in this post I recognized that USLV could likely be forming an ending diagonal/falling wedge.  As you can see from the model in that post, I saw ~$36 as being a sharp vee bottom leading to a strong rally.  This is essentially what happened as you can see from the chart below.  But nothing goes straight up or straight down and so after the bounce to $56, we had a big, vee style pullback into the low 40s again.  This time, the bottom is rounded, not vee shaped.  It suggests that stronger hands are buying now and the resulting formation is an inclining double bottom.

There are three main points that I want to communicate about this:

1. If the falling wedge was a 3rd rather than a C, the resulting countertrend correction bounce should either be to the prior 4th (about $65) OR all the way back up to the top of the falling wedge ($108).
2. Everyone and their dog and in some cases even the fleas on their dog thinks that gold (and thus silver) are only going to bounce up a bit into E of 4 and then collapse back down into a 5th and final lower low.  Maybe that will happen but when too many people are waiting for it, the herd tends to exercise the decision flexibility that is available to it under the wave count and the wave count below can either be an ending diagonal 3rd or C.
3. No matter whether the big wedge was a 3rd or a C, that little bounce to $52 is not big enough to be a 4th!  This means that the recent pull back is likely a HUGE gift to anyone who knows how to read a chart.

So here is the strategy for all gain with little possible pain:

• BUY USLV RIGHT NOW, without any hesitation.
• Set your stops at $39.90 and walk away.
•  If my count is right, they will not be able to take you out and you will make 70-100% easy, perhaps much more.
• If my count is wrong you risk 65 cents, about 1.5%.  Again, I cannot guarantee that the shares go up from here!  Nobody can. All I can do is use a model to determine LIKELY winning entry points that are as near as possible to stop loss price levels for the trade.  This technique limits risk and maximizes the potential for reward.  This is what any smart gambler seeks to do!

This is what asymmetric gambling is all about.  This is the only way I know of to beat the big Wall St machine.  By the way, I like the fact that one leg had a vee bottom while the other is rounded so far.  I have seen this many times, almost enough times for me to declare some kind of new guideline around it - similar to EW alternation.