The chart did respect that trend line by bumping up against it and then moving down sharply. So we are really at a critical moment here and the difference at stake is the whether EWI's model becomes the stronger odds play or Avi's model takes major odds on the Vegas boards.
It will probably take a gap up in order go go higher at this point. In that case, the recent action would probably have to count as 1-2, 1-2 and then the gap would be a 3 of 3. So a gap up would be a serious buy signal, but always buy dips, never chase peaks.
Note that the blue arrow points to the bottom put in 6 weeks ago and which coincides to a major commodities bottoming call made by my model. Will it be "the" bottom? I'm not sure and Avi's HUI chart says that there is one more good swoon left in M+M before a bull market arrives that dwarfs that of the DJIA and S+P bull of the past 5 years.
Having said that, the move up so far looks corrective. That would change in an eye-blink with a big gap above the upper rail but as long as that top rail is resistance the threat is to the downside from here.
So, should we just remain in a state of perpetual worry? Of course not. But we have to have a threat model in mind just as much as we keep a bull model in mind because only by having something to compare reality to in real time will you have any chance at foreseeing the next move before it happens. So below is the log scale threat model for USLV. Note that Avi's near term bearish model is busted if the chart breaks above that red horizontal as red 4 would then be in the region of red 1 which is never allowed by the Elliott wave principal.
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