GDX, UCO update February 4, 2016

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GDX: Has put in a long term bottom. Buying the next retrace will be a great very low risk high reward set up!!! That’s the short and sweet of it. Let’s 1st take a look at the weekly chart. We can see that price has broken out above the falling wedge line in a convincing manner and surpassed the early January high yesterday. That was THE trigger to tell us the low is in. Why? Cont’d below

GDX weekly

Because the decline from that high (orange micro 4) into the recent low was with 5 waves. Now if that was the 1st wave down of a larger wave down, the 2nd wave could not go above it. Well, it did yesterday, thus invalidating any 1,2  count and thus telling us that micro 5 completed in 5 waves down. PERFECT! Con’t below

GDX daily

So what’s next? All daily TIs (not shown) are firmly pointing up wanting to see higher prices. First meaning full resistance is at the white horizontal line at $17. Next up is the low$20s resistance zone. Price is now above the 200d SMA since today and also that signals a trendchange, as the last time that happened was summer 2014. GDX then continued to gain $5 before topping out. That analogy will get us to $20. But we’ll watch and see. Once the 1/a top is in, we the watch the retrace levels for 2/b and that’s where the low risk high reward buying will happen!!

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UCO: long term picture first. Price is still in a large ending diagonal triangle and is working on finishing several 4th and 5th waves. The recent advance last week could be counted as all of nano 4 or as pico a, as the ideal target for 4 would be ~$12.50. However, price was stopped again at the trendline… Cont’d below.

uco 1

Zooming in we can see that the advance off the nano 3 low made in January has been very sloppy aka messy and stopped at the trendline. Since then one can actually count 5 waves down, suggesting a first wave down. The recent 1.5 day advance also and again was stopped by the trendline and retraced a little over 62% of the prior decline from the possible nano 4 high. Con’t below.

uco 2

If we we’re forced to place a bet, then we believe that the 1,2 count off the nano 4 high is the correct one. Yes, the low for oil is not in yet.