[USLV] update and M+M threat model

The immediate threat to USLV shown in the backlink resolved to the upside but that recent move could be C wave action.  So far the best this can be counted is 1/a, 2/b, 3/c.  Now is when we find out if the pullback will be 3 orderly waves or if it will swoon downward hard one final time to blow the M+M longs out of the water and demoralize everyone in the mining industry.  If we see a little second peak that cannot break out that top rail then it will likely pay to BOLO "the owl".


If that final swoon occurs then Avi's final low, which he predicted in price terms back in 2011 near the peak, will have actually occurred.  For his model to be so spot on would have to be taken as a very, very bullish sign. 

EWI currently does not expect that to happen and so if it does I have to suspect their whole B of C model is likely wrong.  That's already the way I have been leaning for some time now because I just don't see how these valuations can be as dismal as they are without a bottom being very near.  Of course, that is just an emotional feeling and so I am trying to keep my mind open to all possibilities at this point based on the data.  Gold at 700 is in fact possible given the very bad things predicted by the EWI model (DJIA=sub 1000 for one thing).

The percentage changes are happening with lightening speed right now.  30%, 50%, 80% changes in just a couple days.  This is volatility to the max and it exists because the herd is overburdened with debt and actually has no way of fairly valuing ANYTHING.  This is a key notion that few if any analysts understand or will admit but think about it.  Interest has been nearly free for years.  The USD carry trade has obviously been gamed and abused beyond anything anyone really can understand.  Monies were borrowed to buy shares all over the place.  If you are a leveraged money manager, you know the risks YOU took and the leverage YOU have but how do you know how much total risk is out there?  You don't.  You can't.  Not with derivatives in the mix.  There is no public info on them because they are OTC (over the counter).  They might as well have called them BCD (Behind Closed Doors).  They have zero transparency and the leverage is massive.  Even though you might like a company, did the other guy like it a lot too?  How many times has this stock been loved on leverage?  How fast will it fall when everyone except you bails out on it to pay their margin call?

So you see, there are no knowable fundamentals.  Babies will be tossed out the window with the bathwater and the kitchen sink they were being bathed in.  This is inevitable.  It's a Ponzi scheme.  When a Ponzi enters the collapse stage there is only one thing you can do: try to get to the exit before the next guy.

Period.