All hands on deck: [ABX] breakout

At the backlink my primary model was for a breakout of key resistance and today it happened "with gusto" on no news.  Below is the model from that post.



Here is the same scale update.  The breakout is clear.  It thrust up from below, found resistance, took a few steps back to get a running start and then smashed through. 

Folks, as you well know by now, my style is to be a grinder.  I'll buy what could likely be the low or an important low and then if the model goes bust I'll stop out for a small loss without a second thought.  That's me.  There are not many who play it this way because they don't know how to use EW.  Also, bottom picking is going to have more false starts than buying break outs.  So the action has been slow off the bottom but don't lose sight of the fact that a 55+% gain has already been made by those correctly identifying the bottom.

So that's me.  But with this breakout I am sure that trading computers are sounding the alarm all over the world and so now everyone who is in the game knows that major resistance has been breached.  The group that is about to join the long side of this trade is the momentum traders or the so called momo traders.  Momentum trading is easier than grinding because you just wait until a break out signal is given before getting in.  Sure you give up the first 50-100% but there are clear benefits to momo trading as well.  There are a lot more momo traders than grinders and that is why we should expect to see the action pick up quickly from here.


For those who are new to the blog, I have been looking for the 5 waves above to finish for some time now.  In fact, I was aware that the September bottom might have been the bottom as detailed in this post.  Today's breakout is the first real confirmation of that observation and that is what will bring the momo boys running.

But the real significance is not the breakout but rather where the breakout is occurring in the broader Elliott wave count.  The 5 waves down that just completed were themselves the last and final wave down of the entire bear market in metals and miners which began in 2011.   That means that the minimum bounce target should be the level of the prior 4th ($22) OR the 38.2 fib OR the 50 fib or even the 61.8 fib.  Any way you slice it the percentage gains are large and this is assuming Elliott Wave International will turn out to be correct in that this is only a B wave bounce with lower lows to come.  If Avi's count is right we are at the beginning of a monster bull market for metals and miners, the likes of which have never been seen on planet Earth.  It will be a 3rd wave up.  When you look at all the competitive debasement of paper money and resulting hyperinflation happening in various countries today, is it really such a stretch to believe that gold is about ready to come full circle and be recognized as the only real money again?

Zooming in we have my latest count.  I will begin to think something is wrong with this count if the chart moves below the green horizontal.  It should not do that.  It should accelerate upward because it should now be in a 3rd wave according to the model.