Today's JNUG skirmish report.

Per my clearly stated in advance plan, I hid in my JNUG bunker to sidestep most of the counterattack that occurred today.  I popped up a couple times and got hit for about 4% net, all told.  Not bad considering the gains from the past few days and the fact that today the ETF was down ~23% at the worst point.  Again, what really matters to me is how low the thing goes without me in it. It is not going to stay down here forever although there are no guarantees when it will pop.  It has to be played day by day depending on how the data we are given models, not how we want or hope it to be.

Below is a model that could play out over the next few days if we are lucky.  

While there is no requirement for all of this volatility, it would provide lot of whipsaw that would wear most traders out.  I mean, who can put up with 25% losses in a single day on a large trade and not be ready to vomit?  Most people think they can play the momo game - wait until a direction seems to be working and then jump in.  The 4th waves are designed to cream these people.  Just when they think it is safe, the chart reverses.  They get stopped out for a big loss and then it repeats a few more times before the chart takes on a real direction by which time the trader is bloody and numb.

Of course, if you just sit there and take it with JNUG you are a fool.  This is a trading ETF, not a long term buy and hold. I could see just holding it for a few days at a time but at some point you are going to get the big retracement and your profits will evaporate unless you learn to use stops and let the negative volatility be your friend which allows you the opportunity to buy more shares at lower prices for the next run.

Below is a close up of how that 4th wave might look.  Note that there is a gap to fill at exactly the right place for the C wave to peak.  To be honest, I drew these lines on the zoomed out view to look like the typical horizontal triangle. I did not even see that gap until I zoomed in to the 10 minute chart.  So it is very interesting to me that my model just happens to perfectly fill that gap.

Needless to say, this model is a trader's dream because if you can see it coming in advance you just pop up from the bunker when the turn is due, lay waste to the attacking forces, and then either pop back in the bunker while they counterattack your ghost or, more balsy and better yet, you trade uniforms and join the shorting using JDST until the next turn is due.

Of course, a move higher than pink "a" will invalidate this model as will a lower low than the point marked pink "b" above.  I really hope we get this 4th wave action because it would give us a "key frame" in the wave continuum - something that makes it easy to recognize where in the count we are.  If this model is correct it will be worth many thousands of dollars to have known it in advance if played correctly.  If this model is not correct it will quickly let us know.