Gold update.

In this post I highlighted Avi Gilbert's recent model for gold.  It seemed to imply that HUI's recent rally was a 4th wave bounce to the 38.2% fib.  As you can see from the recent 60 minute HUI chart, no 5th wave seems to have been put in.    So this should be 1 of 5 down.  At the rate this is playing out so far, it should not take long to bottom.




Then again, this model conflicts with the wave count from EWI and today's GLD chart shows that EWI's count cannot be, for lack of better words, counted out.  While nobody more than I would like to see JNUG collapse back into the "low to mid $2 range" since this is where a lot of these leveraged ETFs seem to find major bottoms (including perhaps the recent $2.20 low for TVIX which from this post we cannot say was completely unexpected...), that fate is far from certain given the potential GLD count shown below.  I mean, is that not a horizontal triangle and if it is must it not be the penultimate wave?  We should be getting a bounce in M+M on Monday after this 36% drubbing of JNUG on Friday and the nature of that bounce will be telling.  If the move is small like 5-7% then beware of the short term dead cat bounce but if this thing breaks back up above blue 4 below then the bottom could be in.

I'm going to say this one more time for the cheap seats: most people should starting to buy something golden right now.  Most people should dollar cost average into a position.   The most conservative move is to own physical metals outright but if you want to get more leverage based on "ownership" of paper assets then for most people I like GDXJ.  Another strategy would be to buy the likes of TRX, DRD and then some other juniors along with GDXJ so you have real diversification including diversification from potentially corrupt managers of the GDXJ ETF.  Only the paranoid will survive what is coming IMO.

2015 will be a fantastic year for gold and miners IMO and this should be the case no matter if EWI (we are at or near the end of the A wave) or Avi (we are near the end of the C wave) turns out to have the right model.   Both models predict rapid gains in M+M into at least Q1-Q2 2015.