When [UUP] peaks, Metals and Miners (M+M) will bottom

UUP might have already peaked at pink 3 but it could still go up one more wave to blue 5.  If my wedge indicator pans out then we should see 5 waves up from pink 4.  It could be a short stroke 5th but the wave count should be 5.  Right now it looks like sideways action which suggests basing for another thrust.  This has been ongoing since May but we should get resolution to this within days.

While the moves way up there are small, they are generating massive volatility in the juniors.  That is because the price of gold is now moving with UUP and even a minor $50 swing in gold price is the difference between many juniors eating or starving down in the 1100 region of gold.  Again, I cannot imagine what kind of carnage would result in the juniors if gold were to go down to $750 as the conventional wisdom thinks it will after the coming expected bounce to $1400.  The more stuff I look at, the more strongly I disagree with them.

So I am going to add one more EWI service complaint to the list that I linked to earlier and that is failure to verify the count from multiple angles.  They rely on sentiment readings (which are nice but which are not conclusive/have no triggers associated with them) and just the count of what they are looking at.  They don't look at the inverse or any of 20 other factors that they could be examining.  Not once have I seen them consider the current capitulation price and volume in the juniors right now and then use it to help guide their overarching opinion about their gold chart wave count.  They pretty much just assume they got it right until it slaps them in the face that it is wrong.  Then they change their count.  Then they get hammered in web comments by people who trusted them too far and got burned.

So in order to not be guilty of it myself, below is my TRX count.  Let's look at the facts here.  In late 2003 it peaked and then declined into early 2005.  Then it began an exponential climb into 2006 which easily counts as 5 waves culminating in blue 1.  The 3rd wave of that motive sequence was the real mover as we would expect, the 4th was a triangle, again, as we would expect.  That whole wave is pretty much text book Elliott.

From the peak of blue one I count one huge falling wedge shown by the grey lines which is now in 5th wave throw under.  The chart is now literally heading straight down.  Has the company collapsed?  NO.  Can it pay its bills?  YES.  Is it working on projects?  YES.  We know that the CEO (Jim Sinclair) does not think these low gold prices can be maintained very much longer and that it is all due to the selling of fake gold (naked shorting of gold). We know this because Jim Sinclair is still going around given seminars all over the country (like this one in SFO) which in which he discusses the coming end of the fake money system and why/how people need to protect themselves.  Thus, he is moving forward with projects in his company because he expects to need the supply as soon as the fake gold market collapses.

So the share price plunge has nothing to do with the real immediate health of the company, it is all panic selling based on the fake so called fundamentals which is the artificially low gold price. 


TRX is falling as quickly as some companies do when their CEO has stated cash flow problems.  But cash flow is mainly a problem for those who have to service debt.  TRX has no reported debt.  Not much cash, true.  But that is only a statement of how quickly it can execute on its plans.  The key thing is that when you have no debt you can just shrink staff to weather the storm.  You cannot do this if you have used debt in order to boost growth.


Bottom line is that TRX is getting defenestrated for no good reason, simply because the herd is in panic.  A stampede (and yes, you are literally watching a market stampede in progress) can go on longer and further than anyone would expect due to the madness of crowds but eventually it stops and reverses.

I do want to point out that the coming bottom will count as blue 2 in my model.  Nobody can predict the future with perfect certainty.  In fact, being right more than 60% of the time is far above average and all you need in order to eventually win.  But IFF the model is correct, it implies that a wild moonshot awaits TRX in 2015.  I don't know what will cause it but the chart is pretty clear about it.  We got 5 waves up and now 3 giant waves back (or 5 triangle rail bumps if you like: proper counts can be made using both techniques).  The next move up should be 5 big waves and not only that, they should form a 3rd wave up.  Perhaps the velocity of money chart puts in a bottom and then we finally get the big inflation.  I don't know what could cause it but the chart says something will happen. Perhaps the gold counterfeiting ring (AKA COMEX) begins to fail to deliver the physical and gets shut down.  Ponzi schemes only seem like they can go on forever.  They always hit a brick wall at some point and no it won't be different this time.

The minute this blasts back up into its wedge channel, the reversal is confirmed but buying it at $1 or below in a cost averaging program seems like a nice way to load up on non-expiring call options on the price of gold and silver.  Of course, no single stock should be too big a portion of your portfolio unless you are playing with small money.