[GLNCY] update

In the backlink I pointed out that Glencore had broken resistance and was going to head much higher.  It was trading at $3.37 back then, and is now $3.84 today.  Both of these are a far cry from the $2 level where I first posted on Glencore suggesting that the wave count and other technicals were ringing the dinner bell in this post entitled Commodities- buy when there is blood in the streets.

In any case, the chart and EW model below suggest that tomorrow might be a good time to start buying into GLNCY if you missed the initial run up because a pullback to the level of the prior 4th OR to the 38.2 fib OR perhaps to the 50 fib which also fills the gap will most likely count as a 2nd wave.  When this is complete we should expect a very fast moving 3rd wave to play out (as if wave 1 up wasn't fast enough).

During wave 3 up I expect all commodities to be moving up in unison.  If you will note, other small/leveraged commodity players also caught a bid at the same time: CJES bottomed at $3.30 and recently hit $5.40, ORIG hit ~$2 and then rocketed up to ~$2.95 in just a couple trading days.  These things are moving up in locked step of their status within the commodity herd.  GLNCY used to be considered the best of the strongest and their shares got washed out as if it would BK soon.  But when the CEO came out and stated for the record that the company was in no jeopardy of BK like the rumors said it was, the shares, which were ready for a reversal anyhow, reactive violently to the upside. 

I guess the herd senses that CEOs will be a lot less likely to lie publicly in this new conservative environment.  I believe that this will in fact be the broader case.  The admission of VW to gaming the emissions wasn't really driven by any specific probe.  The CEO simply realized that he was going to get caught at some point and decided it was in everyone's best interest to just come clean at the point that he did.  In other words, it's a realization that the Ponzi is in collapse anyhow so why keep spending energy fighting it.  This is exactly the opposite of what happens when credit is on the rise.  Con men take strength from the fact that corruption is on the rise as the mammon money grows in power.

Another thing.  This move up was wave 1.  The waves were fast and tight indicating a short squeeze/panic buying was in progress.  Because of this I would suspect that the lowest this will go will be the 50 fib to fill that gap before the buyers step back in.  But don't forget that this will be wave 2 and they can often be deep vee in nature.  So I would not suggest to buy based on price level or gap fill but rather based on seeing a full 5-3-5 or other corrective EW pattern complete.  Of course, always buy the dip, never chase peaks and use stops on your entry points in case you got the model wrong.  It is very easy to mistake a 3rd for a 5th and you don't want to get left holding an empty bag in this Ponzi scheme called the stock market.  Leave that role for someone who doesn't understand what actually moves stock prices.