JNUG update and trading plan.

On Monday I suspected that we could be forming a 4th wave triangle.  Today I modified the count of that triangle to appear as below.  I noted that we got the e wave throw over but when we could not hold it I bailed at $4.30.  More to the point, I got stopped out because I set my stops as soon as I enter the trade so that emotion cannot influence me later on in real time.
 

Zooming in, we can see our old pal, the rising wedge.  I hardly even bother counting up to the peak of these anymore.  I automatically assume these are 3s or Cs.  In the case of the horizontal triangle, it will obviously be a C (IFF the H.T. is in fact confirmed...).  But this pattern is not confirmed yet folks.  It is my leading pattern possibility because it did break out the top rail and then fall back through but until it now puts in 5 small waves down it is not confirmed. 

Look at the sell off action leading into the close.  That's right, it set itself up to be counted as a 3rd or C again.  So the herd still retains full flexibility on what to do tomorrow based on the path of least resistance.   This is the main reason I decided to bail on JDST @ $24 after having bought a full load of it at $21.80 only minutes before.

JNUG does not appear to have actually finished the falling wedge so I think it will run down to the bottom rail tomorrow near the open (about $3.95) before reversing back upward to some degree. 

• Note, if this plays out as modeled, I will be waiting there with old painless.  We'll just be chilling and drinking a Kalik (Gold of course) waiting for the setup to happen (which it might not but then we lost nothing for being ready, did we?).  If the sellers run it down there I will dump a clip on them and then immediately set tight (5 cent) stops.

To WHAT degree the upward reversal might happen is the real question and neither I nor anyone else knows the answer.  But I do know the most likely things to look for and they boil down to the red or blue paths shown above.  The red path says that was a 3rd wave that bottomed into a 4th at 3.95 and then up to a new high for a 5th.

The blue path says it was a C.  The dip down to 3.95 will thus be blue 1, the subsequent bounce blue 2 and then comes the elevator shaft.  If the blue path occurs, the common target would be at least to the bottom rail of the horizontal triangle and it could end up somewhere between $2 and @2.50.  That would be right in line with the rule of thumb I shared some time ago about these things liking to bottom in the "mid to low 2s".

Dear Santa: For Christmas I would please like to be able to catch shorty trying to sell JNUG at around $2.20 after forming 5 easy to read textbook EW down from here.  Actually, it's not for me that I ask.  It's for my little friend, old painless.  So it's all for a good cause, I promise.