[GLD] update

In the backlink I was expecting a reversal upward in gold to begin soon.  I drew a target price of $106.5 but of course, you have to see the wave count before you know that the bottom is in. 



Price targets are just for reference.  The wave count tells you when you buy and sell.  below is my wave count for gold which says that the price bottomed on the 9th and did an intraday reversal.  On the 10th it filled the gap and that was probably part of a 2nd wave.




The alternate count below is close to the primary count above but suggests one more move down to $104.5 is possible.  Stop JNUG out at $6.99 but then stay close to the buy trigger because the reversal should be fast and furious.  OR if your current position is small (like 30% of your intended bet), just keep your current position and add to it on the dip.




Now we are just waiting for maybe one more dip to finish the 2nd wave before the 3rd wave up begins.  It should be a big deal from a percentage standpoint.   I expect that within a month the rags will be buzzing about the virtues of gold again simply because of recent price rises which they themselves currently do not see happening.  Today, for the record, they can take it or leave it.  If you were to ask your friends or read chat boards today regarding gold (i.e. herding investing strategy), they would tell you they are not really interested in it.  And why should they be?  Morons who work for big name financial "news" rags but who don't know jack shit are calling gold a "pet rock".  This level of pessimism by itself suggests we are at a serious low.

This, dear readers, is not likely to be just any old next few months for GLD.  This is where we find out whose model is right: EWI or Avi.  GLD did bottom so far into Avi's long standing price target call of $95-$105.  But the wave structure did not end cleanly for his count to be right.  So I am keeping an open mind. 

Below is EWI's count which says wave A of the 2011 bear ended at red 5 which bottomed and then moved into a huge expanded flat correction which is taking the shape 3-3-5 for blue a-b-c respectively.  Importantly, the EWI count requires that the current move be 5 waves up to something above blue a.  The level of the prior 4th would be about $129 for GLD.  That would be roughly $45 for GDXJ which would be more than a double from current level of $19. 

But for JNUG, the A wave of this retracement was $48 so I have to expect something higher than that.  So my first target will be $70 but it could actually go much higher.  When it is peaking into the 5th wave it should be going damned near straight up.  The reason?  At today's prices, most juniors are priced for BK.  But if gold goes up $200-$300 per the model (again, who is calling for this to happen right now except EWers?  Nobody...) then all of a sudden the juniors get a reprieve from death row.  The means wild valuation swings and JNUG is the derivative attempt to triple their performance.

It is very, very rare to get this kind of rapid movement up in gold but the C wave of an expanded flat is usually explosive so this is one where you will want to try to remain calm on the way up and then look to sell when the herd suddenly thinks gold is safe again.  I have actually been anticipating this setup for some time now and written about it many times in this blog.  This does not mean it has to happen, it is just that I will not be taken by surprise if it does happen.

Current price for JNUG is $7.08, target is $70 or higher (OK, potentially as high as $215 during a short duration spike that, if it happens in 5 waves, you should sell the shit out of).