[GDXJ] update - threat model

Where most EWers go wrong is that they develop a count and then they begin to believe in it blindly.  They might developer "alternate counts" but if you look at them the alt counts tend to be in the same general direction as the pri counts.  In other words, they fall in love with a direction of the chart and then their counts are biased in that direction.  EWI is notorious for this over the past couple years.  Bob Prechter knows that a deflationary crash is what will eventually occur and so his team has had a negative bias for some time now.  Eventually they will be right and I feel their time is coming.  In reading their past few paid updates I see an element of caution in their count moving in and caution implies hurt pride and declining arrogance.  With these impediments back under control I suspect that their counts will get better.

I make plenty of mistakes as well but I try not to get blindsided by them.  The only way to see them coming though is to create specific threat models which run counter to your primary view.  And so here is the threat model for GDXJ.

The first threat after a 3rd wave finishes is that the next wave will be a horizontal triangle (HT) 4th.  I think this threat is busted due to how high it has retraced.  HT need to stop about 15 degrees or more below the top of the a wave.

The next threat is that the retracement will be a zig zag or a flat.  A flat has a 3-3-5 count.  Its possible that the a wave within blue is a 3, the next wave down is a 3 and with one more thrust to ~$30 or ~$31 the current wave will be a 5.  This would screw a lot of EW counts that I see out there which believe that the current wave up must be 1 of a new bull market.  They don't even consider the possibility that it is black 4 as shown.

The key to success here will be to sell the next peak and then sit and watch.  In the bullish case it will have a 3 wave pull back to ~$26 and then skyrocket into a 3rd (or c...) wave of immense power.   In the bearish case it will not stop at the level of the prior 4th or at the 38.2 fib in 3 waves.  Instead it will power down to a lower (and final) low.  This would be the Avi Gilburt model where GLD bottoms at $95-$105.

The market can go either way.  Nobody and I mean nobody knows for sure what the herd will do tomorrow.  There are only odds and triggers.

By the way, it is possible for GDXJ to move up past 31 without busting the threat model.  The level of the prior 4th HT is $30.50 - $35.

Also just to be clear "threat model" does not mean "primary model" or even "first alternate".  It simply means "still quite possible and it would be bad if it happened so keep an eye on the threat".

Also, if the wave cannot make a higher high then we have to wonder if this is a wedge based C wave (WC) under my proprietary view that wedges are usually if not always 3rds or Cs.