[USLV] update

As we edge toward the final 4-ish weeks of the 2011 great metals bear where we should see a long term bottom for the metals and miners (M+M) form,  it should not be unexpected to see volatility increase.  The little fish come in, try to carry a piece of it away but then the crab moves in and the little fish scatter.  Lather, rinse repeat.

In this post I was looking for a near term bottom to form in the $12 (blue) to $12.50 (red) range.  The model from that post is below.




In reality, the recent bottom was about $12.20.  Now, according to Avi what finished, worst case, was 3 of 3 of 5.  That would leave 4 of 3 and then 5 of 3 and then 4 and then 5 before finally ending the 2011 bear.  Best case (for longs) what just finished according to Avi was 4 and now we dive into 5.

At the same time, my w3 indicator suggests that red 3 was in March, red 4 in April.  That suggests that the wave which just ended was either 5 or 1 of 5.  If it was 1 of 5 then per below we have just seen 3 waves up.  So that could be C of 2 OR it could be 3 of A of 2 which is what I would think it should be if we are eventually going to see $19 (the level of the prior 4th).

So here is the play: let it either break down OR break out to 16.50 if that is what it plans on doing and then buy when it gets back down into the region in another week or so.  You would probably be buying B of 4 so that you can catch C of 4 which could be a very strong move here to sucker in more longs for the final smackdown.

Either that or Avi could just be wrong at this point.  EWI think gold is now in an uptrend until at least $1300.  So if this puts in 5 up, don't hesitate to buy the 3 wave dip because another, stronger 5 will likely be close on its heels at the very least and could be much higher.