A quick review of my metals shorts hunting trip results (and other stuff)

In this post I revealed that I was all set up waiting for the metals shorting herd to come thundering into the sights of my Gatling gun AKA "old painless" and commonly referred to as JNUG.  As detailed in this post, I used the chart data to avoid firing too early and giving away my position.  That turned out to be well advised.  But this should not be confused with hesitation or lack of will.   As you can see in this post, there was a clear EW model based strategy involved (keep the green model from that link in mind as you read the rest of this post...).  In this subsequent post I indicated that a major JNUG bottom could be put in on Nov 5th.  JNUG did indeed bottom that day @ $2.85 before skyrocketing over the next 2 days to peak @ $4.44.  , are you paying attention here?  Still think it's all just random chance?  Keep thinking about it.  Forget gut feeling and consider the data.  I don't believe in coincidences.


I then began to open fire at $3.39 on Thursday.  A second burst of fire soon followed on a dip.  I got stopped out on a counterattack but then retaliated with a full "clip dump" buy @$3.30.  I then got stopped out @ $3.84, bought the $4.00 breakout based on the plan I explained here and finally closed the week with a sale at $4.43.

Very early next week we will know if a major and final counterattack will be waged or whether the shorts have had enough and will just run for the hills.  Read on for my modeling of the expected action.






Please review the UUP chart I provided in the very first link above and compare to the current zoom in of just the 5th wave which is presented below.  I modeled it up to 23.50 in that earlier post but it fell shy and formed a rising wedge.  Then it fell in 3 waves which smell suspiciously like a 4th wave retracement to me.  While the herd always retains full control of its own destiny I believe that this wedge will turn out to be 3 of 5. 

What I do not know is whether 5 up will be a short stroke or not.  What I do know is that when the red line breaks down it will indicate that the gold shorts (liberals) will be in full retreat and I will be much less worried about holding JNUG overnight.  We will likely know this to be the case if this UUP chart gaps down on Monday.  That will be a strong buy signal for JNUG.

While this may seem obvious to legacy TA folks based on the coarse heuristics they depend upon (a lower low will have been printed in UUP...), this is not my reasoning.  Look closely at those 3 waves down.  We have a down, and then an up and then a down.  But then the next up overlaps the first down.  So we automatically know this is not a normal motive wave (1-2-3-4-5) because wave 4 can never go back into the region of wave 1.  So this is either an a-b-c retracement that will bounce (perhaps not as high as the blue line... perhaps 5 waves into a DDT) OR it is a motive wave down with an extended 3rd wave.  In other words 1-2-1-2-3-4-5-3-4-5.

IF it is the former, this is my absolute dream.  I made a ton of cash on the first round of fire out of old painless.  There are dead shorts laying all over the field right now.  But I put the dust cover back on the minigun and I am now in the bunker waiting for the potential final counterattack.  If it does not come; if the shorts just cut and run at this point, I will know it very quickly because of the trigger I have set up and I will pop back up and attack the shorts as they beat a retreat.

But if they do what I model they will do, they will burst back into the field to come get their money back from me but I won't be there.  And once their thrust has run out of steam, me and old painless will open up on them from the other side of the field where they did not expect us to be.

So hear me now and believe me later: if they pump it UUP 5 small waves early next week, again, to perhaps a DDT, wait for those 5 waves to play out and then jump into JNUG for astronomical profits in the coming weeks.  And if you get caught in a bull trap, the odds strongly suggest that you just ride it out at this point because UUP is all clapped out to the long side for now.  Some significant level of of M+M counterattack is about to happen to the M+M shorts.  They have just had their way too long.  Not according to gut feel of course, but according to the model.  Gut feel is not your friend in these matters.


Since I am a big fan of using multiple indicators, please take note of the spot silver chart.

That little feature I circled is something that my wife named a unicorn horn after I pointed it out to her on so many charts (yeah, I'm blaming that gay sounding mnemonic on her...).  It is often a C wave indicator.  The larger formation masquerades as a 4th wave triangle but it does not count properly on the 1 minute scale.  As usual there could be interpretation error here but I have found that my odds are increased greatly by avoiding situations where I have doubts instead of just holding through them.  Hope is not a strategy, it is herding behavior.  Sometimes those who hope do win the lottery but usually it ends up just being a sheeple tax.

One more thing.  Since I think that M+M, being a conservative, honest day's labor kind of industry, is out of phase with the liberal markets, if M+M do get one final counterattack from the shorts then the DJIA will also move up a bit higher.  As you can see, it recently completed a rising wedge which then went on to a higher high.  So I have to count the current wave as 3 of 5.  As a result, the opportunity for a gap here is present.  But it will likely be an exhaustion gap which will peter out quickly.  The DJIA RSI is at 69.43, very near the top of its cyclic range of about 72-75 average peak over the past few years.

If your brain has not fried from all of that yet, I might as well comment directly on the JNUG chart and stop beating around the bush with tangential indicators.  The bottom line from all the info in this post is that the model suggest that either the action since Thursday was an a-b-c which will now turn down 5 waves into a slightly lower low than Thursday (dream setup!) OR 5 waves down into an inclining double bottom, perhaps to $3.30 (which would also be a massive gift from the shorts).

The 3rd option is presented below.  It counts that expanding wedge as 5 of 1.  The rest of the blue count should be clear from there, replete with a 4th wave triangle.  I think we will know what is going on by viewing the premarket trade. If it is below $4 then look for one of the above two models to play out.  But if it is just meandering back down to the level of the prior 4th I will buy it around $4 and then set tight stops on it.

No matter what we see, I buy anything above $4.44 because it will mean that a 3rd or C is playing out and these are never the weakest waves.  The 3rd could bring us quickly to $5.75 or even $6 within a couple days.  But more importantly, it will signal that the broader uptrend is in full swing and those who are deep in the money can then just set stops at the buy price so that it is impossible for them to lose money and then let this sucker run.  Once this takes off there won't be no stoppin' of it, worst case, until ~$12 (the level of the prior 4th).  Of course the wave count trumps price targets...