[GDXJ] update - extreme panic selling happened today.

Folks, this is either a 3rd of a 3rd playing out (3 of 3 of 5) or alternatively a washout 5th wave bottom, the polar opposite of a blow off top.   Sentiment against gold and miners was negative before but now we are into the panic selling phase.  This madness of crowds was predicted long ago by Avi's EW model which, incidentally, I have been clear about endorsing for quite some time now.

I don't know if the exact bottom is in yet but JNUG was down 36% in one day - that's the largest one day move I have ever seen for it.  GLD is now in Avi's bottoming range of $95-$105.  GDXJ is solidly in the $18s. More importantly, I count GDXJ as completing 5 waves down into the close.  Here is the model from the backlink to the post I made earlier today where I was not sure if the bottom would come at blue 5 or 5':




















I chose to hold off any purchase earlier in the day in light of this uncertainty.  But now I can make a case for 5 waves down being complete as seen below.   That does not guarantee a final bottom but it does strongly suggest that at least a 3 wave retracement should occur, in this case where GDXJ hits $20 as 4 of 3 of 5 plays out and then is sent packing to lower lows to complete wave 3 of 5.


Bottom line: stay frosty about the potential for a sucker's bounce and then more selling.  After all, Avi's range for GLD was $95-$105 and I mentioned several times using the midpoint of this at GLD=$100 as a guideline.  We have not hit that yet.

Of course, the only real thing that counts is the wave pattern.  Again, it is possible that what is shown below is not the full 5 waves down.  It could be 1-2-1-2-3 meaning we still need 4-5-3-4-5.   So the coming retracement might just be a suckers bounce but I bought into the JNUG carnage after the close in the extended trade looking for at least a near term recovery bounce and perhaps something much more.

When something is moving this quickly it means the herd is in full stampede.  That means lots of selling by panicking people who never saw this coming.  They are just reacting, not thinking.  they have no model and thus nothing to measure price movement by.  They are selling when there is blood in the streets instead of accumulating.  Don't be a sheeple folks. 

JNUG is the same story as GDXJ.  Left side says today was the bottom.  Right side says to expect a small 3 wave bounce and then one more final panic session before the pump and dumpers begin to step in at the bid in size. 















Let me say this one more time for the cheap seats: this is not a scary event.  This was predicted by Avi's wave count a long time ago.  Anyone reading my blog should have been keeping it in mind the entire time, knowing it was a real possibility.  In fact, even before Avi came out with his model, I posted my "dream model" for GDXJ back in early 2014.  Using the same lines as that post used, we can see that the downward slope expected there has remained intact albeit for longer than I expected at the time.  If GDXJ is going to go below the lower rail below bottoming then it could mean it hits $15 very momentarily before reversing.


 

 More recently, as in Jan 2015, I provided the chart below in this post.  It was supposed to show what GDX (not GDXJ) might look like in Avi's meltdown scenario.

 

Since then, what I had modeled as green 4 went up into the range of green 1 so I had to change to the more bearish worst case count shown below.  Because of the range in possible bottoming scenarios, I urge people not to get too greedy if they buy this dip as I just did.  Continue to use stops, especially on JNUG since you can't just ride out months of sideways action like you could in GDX or GDXJ.

Discipline applied right here and right now is going to be where real profits on this long anticipated bottom will be had.