7:19 am PST. Gold rallied back up and closed the gap down from this morning. It looks like my first wave count is still in play. I bought back JNUG long starting from 11.49. The lunch hour is going to be choppy. It is going to be all about the close today. Today is day five from the 1243.20 overlap.

6:10 am PST. I exited my GDX short +.28 & .20.

5:34 am PST. Gold dropping like a rock now. So glad I exited. I shorted GDX at around 24.77. Probably going to $24 at least. Gold to 1216 first. Going fast.

5:00 am PST. Here is my wave count for HYG, the corporate bond etf, which tracks the SPX and Dow. You can see we are only just completing wave v/(iii), which means the SPY still has further room to run, likely until May.

5:22 am PST. I am out of my mining stocks. Gold looking bearish.

4:53 am PST. I have two wave counts for gold as of this morning and I am not sure which one is right. The first count have is that gold has completed a (1)-(2), 1-2 wave up and the next wave up that unfolds is major wave 3 up which would be a sustained rally. In this count gold would only make a shallow 3-day retracement, which it is has done, and the next move would be marching higher. However, this count I am not sure about because first, the dollar certainly looks to be headed towards new highs which typically would cause gold to drop. I would expect in this case for gold to make a higher low while the dollar makes a new high. Secondly, some of the mining stocks have negative divergence going into this new high, but interestingly gold does not on the daily chart, which is what I would typically expect if gold were to make a deeper retracement.

My second count is on my 1-hour chart. Interesting how gold hovers above the downtrend line in the 1-hour chart. This count shows that gold has only completed wave (1) up, which would say that the next move for gold is a continuing correction to perhaps 1200 or perhaps 1180 that would take another week or two. This seems to coordinate better with the dollar rally.

I have longs but in a smaller position. I do have my finger on the sell button if things should turn sour. I watch the miners tick by tick and if they do not do exactly what I expect, I have a very tight stop and I will exit in a hurry.

Gold hovers above downtrend line. This is my second alternate count, showing gold could retrace to 1200 or 1180 in 1-2 weeks.

This is my first wave count.

Silver really has to break out of this channel to signal my first wave count is in play. But it is negatively diverging and might just breakdown signaling my second wave count is in play.

1:05 pm PST. I closed out my XIV trade at the close. The SPY had a good rally and I think has further to go on the upside. XIV trades in anticipation of SPY moves. I think there could be another pop to the upside tomorrow morning and then consolidation during the middle of the day before continuing to climb higher. I might re-enter XIV again tomorrow. Here are my SPY wave counts on the 15-min and 1-min fractals.

Happy Valentine’s Day! To everyone blissfully in love. 🙂

10:53 am PST. GDXJ went to that 40.80 area that I was initially looking for at the close yesterday. It just popped higher this morning first and then closed the gap with no island reversal, going down to 40.69. But the 40.80 area did actually hold this morning on the sell off, and it is a higher low from yesterday’s day three correction. The miners are catching a bid now.

10:49 am PST. EEM, in relationship to gold, is very interesting. I plotted EEM against $Gold charted in the black line. There seems to be a similar correlation between EEM and gold with EEM performing better. The EEM looks like it peaked before gold in 2011, and bottomed slightly after in 2015-16.

9:59 am PST. Scaled out half XIV for +1.80

9:01 am PST. Re-entered XIV at 67.28, getting a pop now, plan to hold for a little longer.

8:07 Stopped out SPY calls and XIV. GDX print at 24.61 811,395.

7:58 am PST. Scalped FAS +.55, adding to my VXX short – XIV long.

7:33 am PST. The UUP, dollar etf, is moving up really nicely and I suspect will make a new high above 26.83. This will coordinate with what I think will be a higher low for gold and second great buying opportunity in the mining stocks before commencing their wave (iii)/3 up.

7:29 am PST. Bought some SPY calls on this pullback. Real-time SPY prints at 232.33 1.3 million block traded. Here’s my wave count. Target 233.65.

GDXJ might go all the way back down to 38.77.