[HUI] / [JNUG] / [RUSL] update

RUSL backlink.


In this post I pointed out that HUI looked to be filling a gap but that it should be left alone if it blew through the gap instead of bouncing there.  The reason for my caution on that gap fill was given in this prior post on JNUG, specifically the bottom chart which is reproduced below.

This is not a bad match for today's action which is why I bought JNUG at the close today.  It is possible that what ended today was just the 3rd wave (3 of 5).  That is why you see the grey parallel lines.  IF the chart comes up to the top grey rail and cannot breakout then we have to brace for one more move down into the alternate black 5 around $1.80.  In a perfect world we would see a rebound tomorrow that makes it clear that a solid bottom is in and that would form an inclining double bottom.  But the inclining double bottom has not been happening much in any stocks of late and these things often come and go in phases.  Sometimes the head and shoulders will be the reversal plan, sometimes the double bottom, etc.  Bottom line: use stops.  Mine are set @$1.91.

Finally, until we get a higher high than black 4 we must also be wary of the potential that the recent action here was just 1 of 5.  There are only odds and not certainties.  But I do like to see that JNUG is likely putting in a bottom into the end of the year.  It sets the stage for a big reversal into 2015.

I raised cash for the JNUG purchase by putting a 2% trailing stop on RUSL.   I think RUSL has a bright 2015 ahead as well but the recent bounce seems to have put in a declining double top right at where we would expect the top rail to be.  Having said that, the count into the low of Oct could just as easily be the 5th wave down as the 3rd.  In other words, don't be surprised to see RUSL gap up above that top rail tomorrow instead of heading lower.  If that breakout happens, especially with a gap up, it has to be considered a 3rd of 3rd breakout.

In late June RUSL began its long collapse from $23 down to sub $2.  JNUG began its even worse collapse from $36 down to $1.80 (so far) about 2 weeks later in early July.  The charts look similar to each other despite this offset and the reason is clear: gold is still trading like a commodity and RUSL is basically a leveraged Russian commodity play since the Russian economy in general is so dependent on commodity exports.