As a result of these rapid price moves which have been responding to the rapidly rising dollar, miners have gotten screwed in a big way and it has happened on exponentially increasing and now massive volume. This has "major bottom soon" written all over it. It does appear that gold is trading in opposition to the dollar still. This is something that I think will happen until at some point gold is remonified by the herd and it begins to treat it like money. After that point, and for a time, gold and the dollar will trade in the same direction and this will cause havoc with markets which always expect them to trade in opposition. The herd will essentially be telling the market that they are losing faith in the dollar as money and so it is going back to the only other thing that it knows for sure is money.
I expect this to take some time to play out and so it should be considered a long term picture. But only small money is made over the long term. The big 10, 20+ baggers are made with shorter term thinking and chart watching. So this is why I am intently looking at the gold crisis that is unfolding right now. The panic selling is an opportunity for anyone who can spot it instead of getting caught up in it. I was hoping for a sell off price of JNUG down to $6 but on Friday it was already down to $4. In looking at the current UUP (dollar ETF) chart, it seems like 3 of 3 of 5 and perhaps 4 of 3 of 5 played out late last week.
The common stopping points are at the middle of the channel and at the top of the channel. Well, that 3rd of 3rd gapped right through the center-line of the channel as if to say "I'm not stopping here!!!!". That lends more weight to the top of the channel as being the stopping point. Of course, arbitrary levels are only useful for coarse estimates. The real story is told by the wave count. In any case things are moving so quickly now that I have to believe we see some kind of significant 5th wave peak put in this week.
So I am just biding my time, waiting for the wave count setup to happen. The Gatling gun is all loaded up and I'm just sitting on the edge of the open field waiting for the herd to come bursting into view so I can start cleaning up. This should be a really significant trade for me because I'm going for JNUG.
Since we don't know what the peak is yet, retracement calculators are of limited value. But we do know that the level of the prior 4th is a common retracement value. This is the least we should expect after such a break out run as this. In order to find out where that prior 4th would be in terms of JNUG, just look at the date that it was put in: 2014-10-15.
On that date, JNUG traded at $11.40. This is about where we should expect the bounce to carry to when it occurs.
Of course, miners don't have to trade in locked step with either gold or with the dollar. Just like markets a often described as forward looking relative to the fundamentals, action in the miners can also occur in anticipation of higher metals prices.
Bottom line, expect a big move up in metals to begin anytime within the next few days. That does not mean it can't go down more first. A back end weighted dollar cost averaging strategy at this point is a good strategy. If you have $10000 to invest, 2000 now, wait for a big move up or down, then 3000 more then wait for some kind of valid wave count to complete and to be confirmed and then do the final 5k.
Nothing goes straight up or straight down forever and miners have been going pretty much straight down for some time now. Something has to give real soon now.
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