Attention crew, buy gold, silver, miners, oil svcs and Russia

I can't believe that anyone would want to own debt laden GE, etc. when the commodities and everything associated with them have deflated to great depression levels.  I am laughing my ass off at this and in looking at various charts it is clear that we are very likely rapidly approaching a major, major change in investing attitudes regarding commodities.

I like to try to catch the exact bottom or top of things.  That is just my hobby and the only reason I am bold enough to even attempt this is because I have the Elliott wave tool to help me.   I don't always get it right but I do get it right pretty often, far more often than is possible using gut feel, and when I am wrong I know it pretty quickly.

But people who do not have time, inclination or understanding to do this should just be cost averaging into commodities, metals, miners, oil services.  My models called an exact bottom on commodities back on Aug 28th.  I used silver as the benchmark but obviously gold and oil services and other related things did not have to be in perfect locked step. They could be off by one small wave but when wave 3 of 3 expresses itself in silver, all commodities are going to go up at the same time. 

Not all birds in the flock of starlings turn at exactly the same time.  It takes time for the herding signals to be understood by all.  Likewise not all fish in a school turn simultaneously.  The various commodities are no different.  But wave 3 is that point in time when the overwhelming majority now agree on the new direction and it tends to pull in 99% of the stragglers.

So when silver confirms gold's breakout, all Hell is going to break loose in everything commodity related.  Oil services are probably going to be one of the most dramatic percentage gainers since they have actually put in a lower low since Aug 28th.  But silver is holding the line per the chart model below and I see this as positive divergence.  We are very likely at the cusp of a direction change and very few days will transpire before it becomes obvious to a much larger percentage of the herd.

Right now the silver chart has a very ugly series of declining double tops.  Unless and until these can be broken out of, the commodities slaughter is not over.  Most traders would be very bearish if not short this chart.  But I would not short this simply because of where it likely lives in the wave count.    A fall below cyan 2, which is only 20 cents on a $14 stock, would immediately invalidate this count.  But I'm thinking that the more likely action would be to gap up above that falling grey trend line.  If this happens it will be an important data point in validating my bullish model because the 3rd of 3 often sees a gap.  If we see this, the trading plan is easy: buy the first three wave dip and then set your stop loss for just below that grey line.  At that point you don't need to watch it all the time.  Just let it go because you will either get stopped out for a minuscule loss or you will see this thing begin to take off skyward.

For those would would rather have higher risk / reward there is always RSX, RUSL,GDXJ and JNUG.  And please keep the oil services guys like ORIG in mind.  ORIG makes a ton of cash, is profitable, is at its 52 week low after putting in 5 waves down which match a model a put out some time ago, and which is known for paying big percentage dividends.  ORIG might not be done so spend 1/3 on Monday, 1/3 on the following Friday, etc to cost average in if you like but if SLV gaps up then ORIG could have bottomed already.  Again, if SLV goes into a 3rd of 3rd it is going to be a herding signal seen by everyone.



Below left is the monthly chart of RUSL. It has all the hallmarks of an inverted owl.  The first confirmation will be the break back up above the lower rail and the second will be when the top rail is taken out.  RUSL is not a long term buy and hold but the owl generally sees a rapid direction on the right hand half of its neck and body.  Below right is the 230 minute chart of it and you can see how it has broken out of the falling resistance line and is now back testing it.  Unlike the RSX which RUSL is the 3x options based time value present version of, RUSL will never actually bottom.  It will run and then at each inevitable pause, it will bleed time value.  So while it is not completely vital to market time RSX, it is completely vital to do so with RUSL.  It cannot be thought of as a buy and hold.  But right now I see it as a strong buy with obvious stop loss trigger right below that falling red trend line.