Thursday, March 26, 2015

[JNUG] [JDST] update

Here is the backlink to JDST.  In it I provided the model below along with some explanatory text regarding why we should not be shocked to see a deep vee second wave down in GDXJ/JNUG.  As you can read at the backlink, it was the HT nature of that mid Feb wave that originally caught my eye and put me on alert to the potential for internal 3 wave moves which are the hallmark of a triangle of some sort.

Below is the most recent snapshot on JDST.  While the recent bottom appears to be in about the place I expected it to materialize, there is no confirmation here in this because you can't verify a support or resistance trend line using only two points and that is all we have for JDST

Given this is the case, a look at it from the JNUG side provides more insight and higher confidence in the JDST model because JNUG's recent resistance was exactly at the trend line created by two earlier points.

I'm not saying this has to play out per above but there are quite a number of important indicators that suggest it will happen and thus it is currently my primary model:
  • Fourth wave HT apparently forming in JDST (e of 4 potentially in progress)
  • 3 wave move into a triangle which is then formed of 3 wave internal moves.
    • On the bull side it is an expanding wedge
    • On the bear side it is a HT
  • GDXJ/JNUG peaked right at the down sloping resistance line.  One should not expect them to break out during wave 1 up.  It likely takes the power of a 3rd wave do to this.
If I am wrong about this, we will know very simply and very soon.  Instead of picking up speed to the downside, JNUG will break out that top rail in a significant way.  In that case, this model is invalidated and I will be buying the dip in JNUG for a wild ride to well above $50.  Note: a small breakout and then a break down is not a deal breaker because red b is an intermediate point and not an end point.  It is thus a guideline and not an absolute.

However, if I am right then we should see a 3 wave move down, likely to center channel but not lower.  This blue 5 wave should be 5-3-5 in nature after which a massive explosion to the upside is to be expected as shown.  You mos def want to be in JNUG if you see this play out folks.  My pullback target range is in the low $15 range but the real guide is the 5-3-5 pullback.

For the record, out of the multiple EW sites that I monitor (including paid subscription to EWI), nobody is providing this level of insight except me.  Several are calling for a pullback but none have shown the expanding wedge on JNUG and the mirror HT on JDST to support their claims.  All they are going by is the very questionable count from early march to now and calling that 5 waves when to me it counts most naturally as 3.  Again, this does not mean my model is correct but it does show a bit more detail of analysis than I am seeing elsewhere.  Remember, even a failed model is useful information as long as the trigger is given early so that little damage is done by having followed a model which the herd decided to invalidate.   As always, it's only about the odds because there are no certainties.

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