DRD update

Based on my short term worries about GLD, I went and took another look at some of the juniors like DRD.  It seems that they are in a similar state as GLD: they better get off the pot really damned quickly or they could take one final shit to kiss the lower rail as shown below.

For at some time now I have been writing that non traders (you know, just regular people who don't trade often) should be cost averaging into something golden because gold is far closer to a bottom than to a top and cost averaging means you will, on average, get a good deal at these levels.  But the wave form of the DRD chart still looks corrective and so there exists the risk that we will see one more big swoon in GLD to finally reach the bottom.  This would be Avi's GLD 105 target that I have mentioned several times in these pages over the past 6 weeks.

Obviously, such a final capitulation in commodities could accompany one more rise in the dollar and a stock market sell off that was sudden enough to scare GLD down one more time due to deflation fears.  Those things are not important.  What IS important is that the wave count allows for it so IFF it happens then it should be treated as a major buying opportunity instead of a signal to go ahead and panic with the rest of the herd.

Would I hold JNUG though such an event?  Not no but Hell no!  I'd stop out and then let it collapse beneath my feet only to buy it up in quantity much cheaper.

I'm not saying this swoon must happen but we need to keep vigilant here because even though conventional wisdom says the gold bull has begun, I don't like the shape of GLD or of DRD.  I could easily be proven wrong about this but if that is going to happen it needs to happen most riki-tik.  The red path would preferably be taken through the blue circle as shown.  Again, this needs to happen SOON - 2-3 trading days or so - because if it doesn't then the risk becomes a massive ride down per the blue path.

IFF the 5th wave still must occur, just keep in mind that it can short stroke.  Don't assume it MUST go all the way to the bottom rail.  The wave count will tell you when 5 waves down transpire.  On something like this it could easily stop at the midpoint of the channel.  We will know the truth about this soon enough but don't panic if you see one more swoon of GLD down to ~$105 ish because keep in mind that Avi's model says that would be the end of the entire metals and miners bear that has been raging since 2011.  In other words, it would literally be a once in a lifetime buy signal for the juniors. 

In that event I would certainly load the boat with DRD to add to my TRX and and treat them both as non expiring calls on metal prices.  TRX might go really, really low in this event so even a small $500 bet could turn into real money a few years into Avi's giant modeled 3rd wave bull market.  Also keep in mind that the shorts will have to cover at some point and when they do they will be fighting each other to buy these junior miner shares that they have been attacking.

Until this resolves itself one way or the other, UVXY is likely the safer play after wave 2 down finishes tomorrow or early Friday.