[GDXJ] update

Avi's count is that 3 of 3 of 5 was the bottom seen in late July.  That would mean that the recent bounce was 4 of 3 of 5.  I think that this is becoming much less likely for gold because it is now impossible for the jr miners. All of the charts in this post refer to GDXJ.

While I do know that all of these charts can move independently, the recent action in GDXJ seems especially questionable when it comes to Avi's "3 of 3 of 5 just bottomed" model.  The big red X has been placed across this chart so that nobody gets confused.  I rarely if ever post charts that I know do not meet the EW rules for a stated count and this one does not.

Avis count for gold was that we had 1-2 and then 1-2-3 and now working on 4 and then 5. But without much fanfare 4 moved into the range of 1, thus invalidating this count, at least for the miners.

Out of all the trillions of possible outcomes (hey, nobody can predict the future in any manner from charts, right?), here are the few that are likely to play out from at this juncture based on the EW principle:

• Per the model below, blue 3 was not blue 3 but in fact black 5 making the recent peak actually the 3rd wave of the new bull market.  This count is in direct contradiction with Avi's primary count but he has to be looking at it far more closely at this point given the height of the bounce.  Additionally, I am on plain record as speculating well in advance that the bottom for GDXJ could likely be ~$18 based on the 90% retracement of the peak.  In this post I wrote:
• "I've observed on many occasions that during the crashes of these volatile ETFs which do not contain options leverage that the decline will be 90% of the peak.  That implies a price target of roughly $18 for GDXJ and if it will be touched, it will play out very rapidly to bottom out within a few days."
• GDXJ was $24.27 at that time.  Since then it collapsed down to $17.90 and then very rapidly bounced to $22.30.
• If this model is real, the current pullback will not likely fall back into the range of blue 1.  The blue horizontal will be support.

• Conversely, if the above chart falls through that blue line, especially if gapped down below, then my next most logical model would be that black 5 above was actually only black 5 of A per the model below.  In that case, the recent 3 wave move up would be B and now we get 5 waves down into C and also 5.

 

From there we would certainly get a very huge rally - perhaps 100% in GDXJ but then we would have to worry that falling wedges are 3rds or Cs and this would be a 3rd.  So then in 2016 we could see one final dip into the real 5th wave of this collapse - thus fooling both Avi and EWI.

There are other similar branches from these scenarios that are possible but I think their odds fall off rapidly compared to these top few.  So what we need to watch now is if GDXJ breaks lower or if it does a higher high than blue 4 of the topmost chart in this post.  If a higher high then odds suggest buying the next dip and considering a longer term hold horizon IFF your buy price holds.