Thursday, February 4, 2016

Possible short term peak in [GLD] this week.

Per the backlink GLD has broken out and the JNUG, NUGT and all other things mining are moving up strongly.  While the strong resistance has been broken out of, it seems to have occurred with the use of a leading diagonal which is not a strong first wave structure.  Leading diagonals or rising wedges often times give back at least the 50% fib and quite often the 61.8 fib or even a bit lower before they reverse back upwards.  We have a clear breakout on GLD but this is only wave 1 folks.  Wave 1s often break out and then fall back so that wave 3 can provide the real, long lasting breakout.

I took my 19.5% profits on NUGT today knowing I might be a bit early but I want to move the proceeds into UGAZ which I think is bottoming today.  I will certainly be back into the miners if I see the modeled pullback OR if something happens that tells me that the rising wedge is not going to be confirmed.

What I mean by this is that it looks like a likely rising wedge but until it breaks back into the wedge channel we have no confirmation.  First confirmation would be if this breaks back down below the down sloping resistance line.  That should be a warning that a deep pullback is likely coming.

Again, this is all about odds and the main reason I am leaning toward the rising wedge model is red 1 below.  I count it as a 3 wave move, not a 5. That is the typical way that the first wave of a wedge forms.  Time will tell if I got this right or not in the short term but longer term I think gold is headed up.

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