However, DRD's gap gives me the impression that instead of being a failed 5th this is actually a 1-2,1-2 stutter step. This is how you can end up with a 3rd of a 3rd and that is where gaps are most likely. I changed the model accordingly below.
While we have not yet seen 5 waves up, you rarely see that kind of breakout in a simple retracement. I think this is some of the early signs of a major bottom in metals and miners. Look how the chart let up onto the support shelf and is sitting there consolidating and likely preparing for the next move up. If you are too timid to buy a full position at the next dip in M+M, I would consider buying a partial position and then average up as it takes off. Once this candle is lit I expect some big percentage moves to be registered to the upside in pretty short order.
As negative as EWI might be on the broader indices, I still prefer the commodity trade over the fear trade at this time. I will be doing both of them in order to diversify a bit but with a heavier lean toward commodities, JNUG, RUSL, and the oil patch.
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