GLD update

GLD nullified the falling wedge pattern that I cautioned people should BOLO for in this post.  That is long term bullish for JNUG.  However, I got stopped out on JNUG today with a nice profit at 5.66.  Yes, really.



The reason I let it stop out is because JNUG is up when the markets are up and down when the markets pull back and I clearly stated that believed that the AM DJIA gap was an exhaustion gap.  To be honest, I was hoping for an intraday reversal so I spent the day "all in" on TVIX after moving my JNUG $$ over there to augment my existing position.  While that move was a wash, at least I sidestepped the JNUG pullback that did occur as the markets pulled back.

While M+M are trading in sympathy with markets right now, these two asset classes are clearly on different cycle frequencies so there should be no automatic belief that if markets go down then so will GLD and miners.  But so far the action in either GLD or JNUG has not been particularly motive looking.  But I still think the odds are high that a major bottom has been put in.  We should get the test of this very soon by the looks of the GLD chart below.

In short, a parallel downward channel still exists as shown.  This SHOULD be strong resistance.  Thus I am quite skeptical that anything except a 3rd wave will be able to take it out and so far I count 5 waves up.  That means that a larger wave 1 up might have just been printed.  IF so then we should expect a dramatic pullback to the level of the prior 4th which just happens to live at the 50% fib.  What a coincidence!

If on Monday GLD does not pull back like I'm modeling below but instead gaps up above the top blue line then forget about it, the rally is on, stop asking questions and get into something golden.  The shorts absolutely cannot take that kind of breakout.  They will cut and run.

Still, I have to believe that the model below has higher odds of playing out and so I am not holding JNUG over the weekend.  I might turn out to be wrong on this but it won't be because of playing my gut feeling.  It will be because after 5 waves up which I count, we must get an a-b-c retracement.  IF it gaps up on Monday, it simply means my count is wrong.