Bullish on JNUG once we get a confirmed bottom.

Multimonth chart shows a breakout from a significant trend line:

We should expect that after such a big wave down that the bottom is a process more than an event.  It could be possible to count this wave as having bottomed on the 16 and then the subsequent bounce into the 18th as wave 1 up.  But the 3 peaks and two valleys do not count well as 5 up IMO.  The reason is that the peak marked blue a below would be small 1 and that marked blue b would be small 4.  Well, 4 cannot go back into 1.  So unless we can get a higher high from here I have to count this as a retracement which I have designated black 4.  Since 5 should be about the same size as 1 when 3 was extended (as it was in this case) it speaks to the possibility / liklihood of a failed 5th.  So you get 5 waves down which form a double bottom of some sort, potentially an inclining one as shown.  It we get that then buy that dip with both hands as this should be the very bottom of a major wave.  Then just put stops below it in case the count is subsequently invalidated.

Bote: both EWI and Avi are bullish gold right now but for different reasons.  Avi things a major bottom is in while this is just A of C to EWI.  If his decades of experience are worth anything, (the more truthful, post federal reserve) Greenspan says gold will be significantly higher in 5 years.  That I believe...

Despite trying to niggle the last nickel out of the JNUG trade I continue to believe what I have written many times now: everyone should be using this opportunity to buy something golden for the long haul.  If the markets are not ready to crash Prechter style yet then inflation will take gold to all new highs in the coming years.  Even Prechter's own deflation charts from 2011 predict a big bounce in gold through 2015.