M+M update

We are getting the expected (per this post) M+M pullback this AM during the extended pretrade .  SLV is now down right to the 38.2% fib which is where it should stop if a really strong rally is in the wings.  The 50 fib would be fine as well.  The 61.8% fib could also happen as part of a deep vee 2nd.

JNUG has not traced back to the 38.2 fib yet.  It is sitting with a 4 cent spread (large) with 4.06 on the bid and 4.10 at the ask.  But it did trace back down to the level of the prior 4th.  I would love to see it hit the 38.2 fib during normal trading hours and I would really love to see a pullback to $3.60 area which would be a gap fill and of course the 50fib.  If we get that in 3 waves and with slowing downside momentum, I will certainly jump back in again if I get that (with reasonably tight stops of about 7 cents of course).

If (when) it eventually breaks out to a higher high than $4.44, don't think the train has left the station without you.  That will be the momo buy signal (higher lows and higher highs) and it should lead to rapid price gains as a 3rd wave (or C wave) begins to play out.  Remember, I was excited a few weeks ago when I thought this could hit the 6s!  Of course, when I saw the volume going exponential with a falling wave count I did not try to catch that falling knife.  But only a fool thinks that stuff goes down forever and this sector is so oversold and so over shorted right now that by far the most likely direction over the next 3 weeks is up.  The only question I have is what happens in the next 3 days.  The pull back could be short and sweet or a deep vee inclining double bottom.  There is even an outside chance that it will put in a lower low than $2.83.  While I doubt that will happen, it has to be treated as a massive gift where you sell everything else and buy the 5th wave down on that impulse because it will not be down there for very long.  Again, I do not model that as very possible; it is my 2nd alternate.

So, primary model is for JNUG to pull back to the 30 or 50 fib and then head higher.  First alternate is for a deep vee 2nd all the way back down to $3.10 (the 84.1 fib) in order to fill that gap.  Second alternate is for a lower low than $2.83.  Nobody and I mean nobody knows for sure which it will be.  All we can do is lay odds based upon a wave count interpretation and other factors.  But we do know that a significant low should be confirmed within days.  When faced with this kind of thing, a prudent trader who is not willing or able to trade each wave swing will simply begin to dollar cost average into a position.  Trust me, when this is trading at $12 or higher you will be beaming ear to ear.  The only ones who get killed by the volatility are those who are greedy and impatient!  For everyone else, it is a gift.

GL in your trades and may the odds be ever in your favor, fellow gambler.