The stalemate between gold and the dollar continues. The dollar failed to rally above yesterday’s highs and prices settled below the cycle trendline. Conversely, gold’s short-term pattern can still be viewed as corrective if the $1200 area holds.

Miners tested but held their lower bear flag boundaries. However, the path of least resistance is indeed lower. The dollar would have to drop significantly between now and 11:00 AM to save miners from another decline.

Silver closed below its bear flag boundary. Declining below $14.31 in the coming days would imply a retest of the $13.65 low.

Oil is inching higher, and I think prices will top in a week or two. I’ll enter initial positions in ERY and SCO at the next swing high.

Consumer sentiment numbers come out tomorrow at 10:00 AM. They have been trending slightly lower. A weak number may support gold. There’s an interesting relationship between gold and consumer sentiment. I’ll expand on this in the weekend newsletter.


-US DOLLAR- The dollar finished slightly higher, but it hasn’t done enough to justify a cycle low. A daily close above Tuesday’s high would form a swing low and likely bottom. Otherwise, declining below Tuesday’s low would recommend a decline to 93.50 or lower before bottoming.

-GOLD- The MACD broke bullishly above the 6-month trendline, so I’m hesitant to call a failed rally too early. However, a daily close below $1198 would support a bearish breakdown.

-SILVER- Prices closed below the bearish flag pattern. Declining below $14.31 would recommend a retest of the $13.65 low set in 2015.

-GDX- Miners held the lower flag boundary…for the moment. If the dollar rallies overnight, miners will likely gap lower tomorrow. If so, I’ll add to my JDST holdings after consumer sentiment. Closing above $19.90 tomorrow would support another bounce.

-GDXJ- The flag pattern in Juniors is a little skewed due to volatility. Nevertheless, prices closed below Tuesday’s engulfing pattern, and the path of least resistance is lower. The dollar would have to drop significantly before the open to save miners from another breakdown.

-JDST- I may add to JDST if miners break lower from their bear flags.

-DSLV- I may add to DSLV if miners break lower from their bear flags.

-COMPQ- Stocks continue to catch a bid. It would take a close below the 7950 gap to support a top and downside reversal.

-WTIC- Oil is approaching the right shoulder target of a potential head and shoulder top. I’ll initiate positions in ERY and SCO when a swing high becomes apparent.

-ERY- To play a potential decline in crude I’m considering positions in ERY and SCO. If the stock market declines with oil, ERY should get an extra boost.

-SCO- When a top in oil becomes likely I’ll split my capital between ERY and SCO.

I’ll update before the open.

Have a great night.