More thoughts on M+M: JNUG model and trading plan.

It's likely that we were all given a great gift on Friday with the collapse of JNUG.  Metals went down as well but JNUG cratered.  The turns are supposed to be scary and difficult to count lest everyone and their dog get in on the fun.  So here are a couple more insights as to my current JNUG model to help you realize that now is the time to go buy something golden and that no the train has not left the station without you. Not yet.  In fact, the train has just entered the station and was shifting around a bit as it came to a complete stop.  It was rightfully perceived as dangerous to board before now.  But the doors are now wide open and now is the time to board.

Buy something golden folks.

For those who care about grubbing every penny out of the trade, below left is my current view on what is going on:  The bottom in JNUG was actually put in on Nov 6th and since then it has been forming an expanding wedge wave 1 of the new bull market.  There is little else that can account for this particular kind of volatility.  As you know, volatility of the expanding wedge just gets higher and higher over time until the formation is complete.   This model explains all of these strange 3 wave moves we have been seeing.  It also explains the long horizontal triangle from Nov 19-26 and then the subsequent sell off on Friday that kissed the lower rail.  Of course it will be negated by a lower low than what I have marked as red 4 but we should not have to wait that long to know if the model is good or not.

To expand upon what to look for, observe that above, right we see just today's action which was a fat 23% move at the close.  I see this as a bullish wave 1 of A of 5.  In other words, the move up to $9-$10 should not be a straight shot but rather an a-b-c.  And since the recent B of 4 wave was a H.triangle, the next B of 5 wave should be a sharp vee.

The real tell should be tomorrow AM.  If this count is right we should expect to see a 3 wave pullback to the level of the prior 4th which is at around $4.10.  The 38.2% fib would be $4.05.  The 50 fib would be $3.91 and the 61.8 fib $3.78.  All of these are pull back targets in this mode but I suspect that, due to the need to boogie pretty quickly to the top rail, the pullback will only be to the $4 level.  That part is gut feel, not supported by any model

Now, if we get a small pullback and then a higher high than ~$4.50 this is a clear and strong buy signal for people who would like to double their money over the next 5-7 trading days.  Yes folks, double.  That's just how quickly JNUG moves from these low levels.

If you decide to buy in tomorrow based on this model data, look to hold until you see an a-b-c to break out the top rail.  That could be $9, $10 or $11.  If you see that a-b-c in the form of 5-3-5 move up above the top rail then sell baby sell and let the shares come back down to you.  If they hit $10, the 50% fib pull back would be $6.70.  This is where you mos def want to be in the shares because that would be wave 2.  Wave 3 could then scream up to $14-$15 in short order.

This is where serious money is likely to be made by those who are not afraid to trade.