GDXJ: model price predictions vs. support and resistance triggers based on wave count.

I've gotten a couple of reader comment questions of late about the potential price level of JNUG.  I want to be sure people are thinking straight on these matters.  Medium to long term price predictions based on chart levels so far are all good and fine but those should not be the focus.  What should be the focus is nearer term chart shape and potential resistance support levels, especially support levels which, if broken, confirm a negative next move for the chart.

I'll say it again for the cheap seats: I do not know for a fact what the herd will do tomorrow or the next day or next week or next month.  Like a reasonably skilled guide on the African plains I can say what the herd is likely to do next based on what they just did.  While my track record is far from perfect I have made a good number of correct observations and have even managed to make money this past year even though I view metals as under priced in a falling market and equities as a bubble in a rising market.  In other words, I don't let my long term views get in the way of making short term moves if I think the odds are with me on a given play.

The herd is fluid and semi chaotic and has  lot of leeway open to itself in order to get from here to there.  This is why I look at many different charts.  I look at the stock market equivalent of wildebeests and zebra and pronghorns, all.  They all need to eat, drink, sleep and procreate.  If there is drought and famine they will all migrate to where there is plenty.  In general it helps me increase my odds of knowing where I will find the herd next but I do not mistake that with "knowing" anything and neither should anyone else.

With respect to Miners, especially the juniors, I see some chance, although it is not my primary model, that Friday's action could turn out to be a wedge and if it does then it will be WC.  That would imply the potential for the count below wherein the low of Nov was only a 3rd wave and we have been tracing out a HT since then.  In this case I would really like to see a move up to the green line in order to get the right shape to the HT but, and here is the important part, a fall below the lower red rail of the wave marked wc? below should be treated as a sell signal until such time that a higher high negates the WC label and turns it into W3 instead.  If this is the case it could still be forming blue c of black 4 which would be a HT with the top rail shown in green.

So again, I think we are much closer to a bottom than to a top but the action gets hard to read near the big turns and this is by design.  So watch the short term support and resistance levels and let that be your focus more than long term price targets, especially when playing JNUG, because the percentage swings can be staggering.