[GDXJ] big picture

Not everyone cares about trying to catch the exact turn which is what the short term waves counts are all about.  In fact, it is wasteful from an economic perspective for more than a small fraction of people to do this given the amount of time that needs to be invested.  Most people should focus on catching the major turns.  To that end I want to remind people about the big picture in the gold mining industry as seen through the wave count of the chart of the junior mining ETF.

Below is the log scale of the weekly bar chart for GDXJ.  The big road marker in this wave count is of course the 4th wave horizontal triangle.  It is one of the few "must" rules of the Elliott wave principle: horizontal triangles must be the penultimate wave.

Well, the HT below no way counts like a B wave thus it must be a 4th.  And after E of 4 is done we expect 5 quick waves down into wave 5 which should be about the same length as wave 1.

EWI says that was 5 waves down into A.
Avi says it was 5 waves down into C of 2.

Avi would not be surprised to see the blue path but either Avi or EWI would believe that the red path is possible. 

The difference between them is that some time after the horizontal line, EWI believes that gold will begin to collapse into a C wave whose termination will be in the $700 range.

In truth, the recent bottom could possibly have just been 1 of 5.  Per the book The Elliott Wave Principle by Frost and Prechter, wave 5 of commodity runs tends to be the extended wave.  Wave counts done in real time are probabilities, not certainties.  Don't expect something more than that and you will never be disappointed.  Thus we do have to BOLO for a 3 wave move up into 2 of 5 and then a lower low into 3 of 5.

At the same time, GDXJ has lost 90% of its peak value and that is often where these things bottom out.  Thus it will not surprise me at all if we begin to climb a wall of worry here that is just higher lows and higher highs.

So unless you believe that gold is nothing more than a pet rock (a statement whose ignorance is only matched by its arrogance and belief in the status quo) now is the time to be cost averaging into something golden.  If you wait for it to become obvious then it will have gone up so much already that you will talk yourself out of buying at all and thus miss out on what will eventually come to be seen as one of the greatest opportunities of all time to buy the mining industry.