Wednesday, April 8, 2015

I re-bought [JNUG] into the close today. [USLV]

In the previous post on GDXJ I wrote, "Anything below $24.10 is a "sell first and buy back later if false alarm" situation IMO."

Well, I got stopped out of JNUG at the GDXJ equivalent of $24.10 but I'm starting to think that this was just a gap fill and that the next move up will be the real "with gusto" breakout.  Here is the GDXJ chart showing what could very possibly be a gap fill.

I'll be the first to admit that this chart is luke warm in terms of EW count.  It is a series of steps up of higher lows which is bullish I don't see the clear and unmistakeable motive wave signature.  So I'm wondering if this will be a 1-2, 1-2, 1-2 deal where a 3rd of 3rd will gap up suddenly in order to leave as many mining gamblers standing on the train platform as possible while the juniors take off.  This is all very speculative because the chart of the juniors remains ambiguous.  Most other EWers will just leave it at that but I like to look at other things for more evidence and I think good bullish evidence can be found in the ultra silver chart as shown below. 

After 5 waves up we just got a 3 wave move back to the 50 fib.  The stop here is very clear: today's low in all metals and miners.  If this model is correct then we could well see a gap up very soon as shown which would power the juniors to much higher highs.

I think it is notable that the recent high on JNUG was ~22.10 while that of USLV was ~$23.20.  JNUG only pulled back to ~$18.85 while USLV pulled all the way back to ~$19.60.  I would normally expect JNUG - being the triple ETF of the most volatile sector - junior miners - to be more volatile than the triple silver ETF.  So I think it is bullish for miners that sellers of the juniors are showing restraint, at least so far.

This model has a very short leash.  If it is correct, the next move up should be a 3rd of 3rd so if we do not see rapid upside then we should get very wary very quickly.


Anonymous said...

Hello captain, any update for JNUG? Holding from the 19ish and unsure if I should keep it given the strength of the dollar right now.

The Captain said...

I am personally not thrilled by what has transpired. Today USLV touched $18.25 right down to the 70.7 fib. before bouncing up to sit right on top of the 61.8% fib again at 18.86. This could still turn out to be a deep vee 2nd wave but a lower low in USLV tomorrow will send me back to the sidelines in JNUG (I am in fact holding over night).

The only good thing I can say about it is that it continues to print higher lows for now but it does appear to be forming some kind of triangle. It might be telling us that we still have one more wave down. I'll do a quick update post.

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