Warning on metals and miners. [SLV]

Here is the backlink to the SLV model.  The choppy mess which have been silver and gold charts were given every benefit of the doubt but today's sell off in silver broke critical support and so while I might not know what is going to happen next, I do know that the SLV model I have been using is bust.  Now that I know I am flying blind here, continuing to gamble on M+M is foolish until visibility is restored.  That is the prudent EW trading mentality and anything else is just winging it and hoping for the best.  Good luck with that because that is all you are left with when you don't have a working EW model.



In any case, it is useful to analyze the model failure and some of the signs that could have helped the real time chart watcher see it coming.  If my prior model (above) was to be correct, I expected a rapid move up at this point with high potential for a gap.  While the chart did move up into the expected reason it was choppy and corrective looking the whole time.  Of course the EW stop was at just below red 2 in the model above which is clearly pointed to by an arrow above.

One tendency I have seen with EWers is to fall in love with a count.  I really try hard to stay open minded about any specific count.  For example, the bogus count below would be a natural fallback for many of the wave counters I have seen on the web in an attempt to keep this bullish count alive.  Unfortunately, the best candidate for blue 1 is marked on the chart and we just saw what could have been/was expected to have been blue 4 cross back down into the region of blue 1.

Could blue 1 actually have been one of the smaller subwaves on the far left?  Sure.  But the analysis gets less and less natural the smaller that first wave is assumed to be and there are simply better counts out there to trade right now.  Bottom line is that this choppy crap is being too tricky to count well and more data will be needed in order to form a plausible model but until then I would be very careful with M+M.

If you really must find a bullish count in here, below is about the only one I could muster.  Is it possible?  Yes.  It does meet EW rules.  But it is so erratic that it diminishes the odds for success.  Why play such choppy crap when other models seem more predictable and straightforward.  In truth, my gut fee is that M+M will rally and that this is the market's way of shaking as many players as possible.  We all know that everyone and their dog is talking about gold again because of all the global problems.