Again, Il have to keep it quick due to work pressures but this is such a pivotal time for the metals and miners that I just have to get a post in on the matter. We are obviously a 5th of 5 down on JNUG. The log scale shows it best. A couple of key features to this model:
- the 3rd wave down was a falling wedge. As LT readers know, this is not an EW rule but rather an Economati-exclusive insight which has thus far been proven to be of significant value in determining the true wave count.
- the 3rd of that 3rd wave (within the blue oblong) broke down the entire width of the orange upper and lower channel lines in one strong wave. Only a 3rd of 3rd has the power to do this.
- I count that we are working on C of 4 right now, should take us to the level of the prior 4th in the $2.20-$2.40 range before turning sharply down one last time. The wave could go all the way down to the black down sloping line that would connect red 1, 3 and 5. It could also be the same size as red 1 which would imply about half of that pullback and perhaps even a failed 5th.
- After that red 5 is in we should be in for a wild ride indeed. The first target would be the top of the current wave @ $6. That should be a no brainer. Much higher potential is possible (and in fact likely).
The drubbing received by the juniors of late can only be followed by a massive unwind of this coiled spring. The wild volatility that is now being seen in the marginal currencies is an indicator that very bad things are coming to the currency markets. Mish is predicting that we are "on deck" for a global currency crisis.
Mish's views, which were appended to those of Albert Edwards in this post are:
Deflation Shockwave Thesis
So basically, the sovereigns keep devaluing their currencies relative to each other but at some point those digging up the oil and mining / refining the gold and doing other real work just tell the central bankers to Fuck Off because it becomes clear that none of their money is worth anything. That is the meaning of a "global currency crisis". In this crisis, the con men finally have to acknowledge the monetary value of gold which is far, far higher than it trades today in any currency. The con men know this which is why nobody ever pays their debts in gold. They will pay with paper bills and they will pay using more debt but they will not pay with real work and they will not pay with gold. They will admit that the whole global monetary system is one big fraud before they actually pay any bills using real value.
- Next phase of currency wars is underway.
- Abe will "do whatever it takes" to produce inflation in Japan.
- Abe will soon "lose control of the situation".
- Yen sinks to 145 to US dollar.
- China will respond by devaluing Yuan.
- "Tidal Wave of Deflation" heads West.
- US brands China a "currency manipulator"
- Global currency crisis ensues
- Gold soars
So basically, the sovereigns keep devaluing their currencies relative to each other but at some point those digging up the oil and mining / refining the gold and doing other real work just tell the central bankers to Fuck Off because it becomes clear that none of their money is worth anything. That is the meaning of a "global currency crisis". In this crisis, the con men finally have to acknowledge the monetary value of gold which is far, far higher than it trades today in any currency. The con men know this which is why nobody ever pays their debts in gold. They will pay with paper bills and they will pay using more debt but they will not pay with real work and they will not pay with gold. They will admit that the whole global monetary system is one big fraud before they actually pay any bills using real value.
Oh, one more thing. By "they" I mean "they that have guns and who are strong enough to protect themselves from con men stealing their gold. Ukraine specifically does not fit that description as their leaders sold out the people by giving up their gold to the west because of the war. Or maybe the war was needed in order to find someone to part from their gold in exchange for military support. No matter what, the gold is gone and the people are left holding an empty bag of paper monopoly money which is now hyperinflating since there is no gold that can backstop it. So sad what ignorance of an unarmed population allowed those con me to get away with.
UUP: While it seems pretty clear that 5 wave sup have transpired and a pullback (or new bear market even) is now taking hold, we still have to see what happens to King Bullshit Dollar at the lower rail. A nice gap down though that level would give a major boost to the miners IMO.
Right now people are assuming that all non US currencies are going straight to zero including the Yen and the Ruble and yes even the Euro (If the EU breaks up -even a little bit- what is the Euro worth?? Zero!). Eventually this will happen - they will go to zero. And then the dollar will go to zero as well when we get the new global currency shoved down our throats. Never let a good crisis go to waste according to Obama's staff. But the stuff won't go straight down. The Yen, for example, is now in a retracement and the YCS (inverse yen) ETF will likely come back down to 60 at least before making another run at hyperinflation. In fact, it could come down much further if the recent move from 2012 2015 was an a-b-c as the model below implies. Of course, that triangle could just as easily be a 4th wave instead of a B wave...
The Ruble will also stabilize given the 17% interest one can get on Rusky Debt.
So now I just pulled over to the side of the road driving home from the customer site to look at the markets and I see JNUG up at my target bounce point of $2.20-$2.40 was clearly hit. From the above model I the expected 5 more waves down to finish the count. I surmised that they would result in a lower low to perhaps $1.50 before taking off for real.
Well, since that $2.28 high, we got 5 waves down which bottomed at $1.93 at about 3pm. But instead of getting 3 waves back up and then crashing down to lower lows, it looks like 5 waves up, not 3. So I smell a failed 5th possibility right here. Remember, EW does not say how big waves must be, only the wave count is actually defined. Are there traditional/normal size targets? Yes. But none of those are inviolable. The well established concept of the failed 5th is testament to this fact. Only the wave count itself is inviolable.
Well, if I had to bet, JNUG has just set itself up for a 3rd wave gap up tomorrow AM. Time will tell but this is where I suspect that the miner charts and the DJIA part company. They have been tracking closely for some time now, probably to throw as many as possible off the 3rd wave that will likely be the divergence point. It's important to do this because it is where the real percentages are made.
This is potentially a fantastic moment for the juniors. If my model is correct we should see these begin to move up rapidly into 3 of 1 up while the DJIA withers into wave 3 down. Long UVXY and long JNUG is the play for this model.
Of course, nothing is certain until it is done and the JNUG chart could turn into a declining double top breakdown where the next wave down is 3 of 5. So here is the deal: If JNUG is up at the open it will likely be way up at the close. If down at the open, I'll probably sell in the premarket and then look for another entry point. But I am holding overnight because I think the odds favor us heading into 3 of 1 up tomorrow.
UUP: While it seems pretty clear that 5 wave sup have transpired and a pullback (or new bear market even) is now taking hold, we still have to see what happens to King Bullshit Dollar at the lower rail. A nice gap down though that level would give a major boost to the miners IMO.
Right now people are assuming that all non US currencies are going straight to zero including the Yen and the Ruble and yes even the Euro (If the EU breaks up -even a little bit- what is the Euro worth?? Zero!). Eventually this will happen - they will go to zero. And then the dollar will go to zero as well when we get the new global currency shoved down our throats. Never let a good crisis go to waste according to Obama's staff. But the stuff won't go straight down. The Yen, for example, is now in a retracement and the YCS (inverse yen) ETF will likely come back down to 60 at least before making another run at hyperinflation. In fact, it could come down much further if the recent move from 2012 2015 was an a-b-c as the model below implies. Of course, that triangle could just as easily be a 4th wave instead of a B wave...
The Ruble will also stabilize given the 17% interest one can get on Rusky Debt.
So now I just pulled over to the side of the road driving home from the customer site to look at the markets and I see JNUG up at my target bounce point of $2.20-$2.40 was clearly hit. From the above model I the expected 5 more waves down to finish the count. I surmised that they would result in a lower low to perhaps $1.50 before taking off for real.
Well, since that $2.28 high, we got 5 waves down which bottomed at $1.93 at about 3pm. But instead of getting 3 waves back up and then crashing down to lower lows, it looks like 5 waves up, not 3. So I smell a failed 5th possibility right here. Remember, EW does not say how big waves must be, only the wave count is actually defined. Are there traditional/normal size targets? Yes. But none of those are inviolable. The well established concept of the failed 5th is testament to this fact. Only the wave count itself is inviolable.
Well, if I had to bet, JNUG has just set itself up for a 3rd wave gap up tomorrow AM. Time will tell but this is where I suspect that the miner charts and the DJIA part company. They have been tracking closely for some time now, probably to throw as many as possible off the 3rd wave that will likely be the divergence point. It's important to do this because it is where the real percentages are made.
This is potentially a fantastic moment for the juniors. If my model is correct we should see these begin to move up rapidly into 3 of 1 up while the DJIA withers into wave 3 down. Long UVXY and long JNUG is the play for this model.
Of course, nothing is certain until it is done and the JNUG chart could turn into a declining double top breakdown where the next wave down is 3 of 5. So here is the deal: If JNUG is up at the open it will likely be way up at the close. If down at the open, I'll probably sell in the premarket and then look for another entry point. But I am holding overnight because I think the odds favor us heading into 3 of 1 up tomorrow.
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