Gold (December contract) is coming into support between $1206 – $1200, currently at $1207. There is a convergence of short-term trendlines and retracement levels between $1198 – $1200. This area needs to hold tonight and tomorrow to make another attack on $1220. The shorts defended $1220 well today and don’t want to see this level breached.
The Dollar broke the June/July support line and reversed slightly. However, I don’t think the cycle bottomed just yet. Traders likely bought the support line attempting a reversal. I think this is just a 1-2 day rebound that will rollover relatively quickly. A measured ABC correction recommends a decline to the 93.50 level in the Dollar. I’ll explain in tonight’s report.
Miners sold off sharply, and investors are still hesitant – understandably. To err on the side of caution, I’m hedging my positions in JNUG and USLV. I’m buying an equal dollar amount of JDST and DSLV. I’ll remove the hedge in a few days if gold holds the $1200 level and miners invalidate today’s bearish engulfing candle.
-JDST- I’m buying an equivalent dollar amount of JDST to square my JNUG position.
-DSLV- I’m buying an equivalent dollar amount of DSLV to square my USLV position.
If things go well, I should be able to remove the hedge in a day or two.
The Tuesday report should be out around 6:00 PM.