Quick thoughts on gold and miners

Folks there is no bigger a gold bull than me but when stuff is going straight up you have to give it a chance to relax.  I think there could be sector rotation from gold into oil and oil services.  This is not EW but it's what I think.

But here is what I know:
- everyone suddenly went ga-ga for gold after calling it a pet rock
- the wave from that marked blue a below down to the recent bottom does NOT look motive. 
- If this model is true then I do not expect blue E to go above blue A.

EWI had a view on the bottom of gold in late 2015.  It confounded them and their first count went bust.  Then they regrouped while Avi was on the fence and EWI came up with a new count that pointed up toward their B wave target.  Avi began getting long side conviction a couple weeks later.  Now both are gold bulls. 

They may in fact be right but everything since August 2015 is a steaming pile of potentially dangerous shit to my eye. It COULD be counted as blue D being 5.  This is how I initially counted it and this is how both EVI and Avi count it but now that it has cleared the top rail I have to say that it looks like a potential series of threes and that suggests it is all corrective.  I didn't want to say anything until the top rail got pierced but now that it has I have to say that there is a threat model as shown above: a falling, expanding wedge not made of 5s but of a bunch of 3s. 

Neither Avi nor Ewi nor anyone else in the EW mainstream is talking about this or has even mentioned it as a possibility so treat it FWIW but it would not be the first time I scooped them  and so it is something to BOLO for.  I cannot guarantee what will happen next but I believe in managing risk.  A break below that top rail is a sell signal and do not re-buy until you ether see EITHER:

- 5 waves down forming a lower low than blue D OR
- some good sized pullback that can be explained by a valid EW count  OR
- an break above the top rail again.

In short, own it as long as it lives above the rail.




Even if the recent move up was part of a larger bullish structure I think you have to sell into an end of day rally which throws over the top rail of a wedge because in that case it is likely a W3 with some kind of pullback to be expected next week.