[JNUG] update - beware of the potential for one more swoon.

So maybe you stood side by side with me in thinking that the backlink model was bullish.



If so, congrats on the big move up since then.  JNUG trades today at $8.71 - a nice 18.8% increase from the $7.33 level that was in effect at the time of the  post.  But if we are honest with ourselves, this could still be the B wave of blue 5 down as shown below.

This kind of swoon could easily happen if the DJIA begins its journey down > 1000 points to close below 15300 over the next week.  After all, it currently looks like gold is trading in locked step with the DJIA although not because there is a hard and fast fundamental tie between the two.

In any case, do not think you are out of the woods yet on the dark blue path!  Soon maybe but not yet.  Even if that doesn't happen, the red path could play out.  Until the wave breaks out the top rail of this large falling wedge, massive downside is still possible in JNUG!

Again, I am not saying it has to happen but I am saying that I see the odd only 60:40 against.  If we can break out the top rail tomorrow then all is good as long as we stay above that rail.  Set stops for $7.75.  If this is really wave 3 breaking out, the chart has no business going down that low (as it would mean wave 4 ventured into the area of wave 1).


 

The bigger picture behind the potential swoon shown above is seen in the falling wedge model below.  Cyan A seems to have been 5 waves to me, not a 5-3-5 a-b-c as one would expect for wave 5 of a falling wedge.



IF there is one more downward swoon in store for JNUG as shown then I will get stopped out at $7.75 and then expect about 3-4 days for it to bottom, hopefully with a throw under of the lower rail.   If we are so lucky as to get that I am going to pile in heavy because the bounce off of that would simply be huge.  It could be a 10 bagger even with gold topping at $1350 per Prechter's model.

Bottom line: I remain long but with stops at $7.75.