Be careful with [JNUG] right here folks... [GDXJ]

In this post I modeled the potential for a JDST breakout.  I wrote: "I would be exiting JNUG positions right about now -sell the next significant peak or if it goes down more than 7% (i.e. 7% trailing stop).".  My interpretation of the wave model served me well this time with JDST trading as high as $9.35 into the close.  The following chart shows the potential implications on JNUG and none of them are very good for JNUG longs.  It is always better to err on the side of caution and risk losing out on potential gains than to hold through massive losses.


Chart below, blue 3 is pretty clearly a 3rd wave collapse. What is not so clear is whether wave blue 4 was actually 4 or just a of 4.  Because of how choppy and shitty the wave appears, it can be counted either way.  But the recent wave up from mid Dec is not choppy.  It still has two variations but it is not choppy.  The first variation is that this is 5 waves up and that would be the primary count right now.  So it is pink 1.  Depending on how the wave goes back down will tell us if the pullback is pink 2 or something worse.  But we really must expect a pullback to either the 38.2 fib which would also fill the gap marked by the pink rectangle (red path) or back to the level of the prior 4th (the blue path).

Anything lower than about $25.90 on GDXJ must be treated with great caution because if this really is a new bull market already started per the conventional wisdom EW count, it should only really pull back to the 38.2 (and have problems even coming back that far) before the buyers pile in and buy the dip.

To the down side, consider that C waves are generally much cleaner and clearer than A waves.  Consider that the move up from Dec can be construed as a wedge.  If WC then the the miners are about to take one more good sized move down. 

I will also note that I saw a comment by Avi Gilburt the other day saying he was still expecting a high probability of a lower low in M+M (95-105 on GLD).  So nothing about all the moves since his Nov article have changed his story (and I have seen that he will change his story if the wave count requires it).

Nobody knows the future and even Avi said the other day he begins buying the 3rd wave down of any expected turn and then picks up more if it goes into a deep 5th simply because he knows that major turns often have short stroke 5ths and he doesn't want to be on the sidelines when the shares begin to turn around.  So he's not 100% sure and in fact nobody can be 100% right because all of this is based on probability not certainties.  But I will say that if I wasn't using the wave count to trade by then I would probably not be doing as well over the past 14 months as I have been.