Metals and miners started strong, but follow-through was lacking.
We may have failed breakouts in GDX and GDXJ. The prices action tomorrow should provide some transparency. Yesterday’s lows and today’s highs have become key pivots. Closing above today’s highs would restore the bull flag potential. Whereas, closing below yesterday’s lows would recommend an October top and strengthen the potential for declining prices in November/December.
Oil was clobbered today. I think we will see a short-term bottom/bounce within a day or two. However, the severity of the October decline suggests more work needs to be done before prices arrive at a sustainable low.
I think the stock market is carving out an intermediate-term bottom. Prices should find support between now and the elections. Depending on where prices bottom, I think we could reach new highs in some sectors by year-end.
-US DOLLAR- The dollar remains within striking distance of the 95.75 breakout point. A rally above the neckline would recommend a 98.00 target and promote a top in gold. The dollar would have to break below the October 94.47 low to register a failure.
-GOLD- Gold broke upward from the small triangle pattern. Prices reached a high of $1243. Follow-though lacked after the open and prices slipped back towards the consolidation. It’s been 108-trading days since the May 21st low. If the 108/109 day cycle is still valid, we could see an inverted cycle top today or tomorrow. Progressive closes below the 10-day EMA would recommend a top.
-SILVER- Prices made a new closing high but are yet to break above the $14.95 high set on October 2nd. The overall pattern from the September low remains similar to that of the May/June timeframe.
-GDX- Prices opened above the upper triangle boundary but finished back near the middle of the range. Prices tagged the $20.51 gap in early trading and immediately reversed. Overall, I’d say today’s performance was neutral to bearish. Tomorrow’s reaction will give us a better feel for the trend. Closing below yesterday’s $19.68 low would support a top.
-GDXJ- Juniors failed to breakout of the flag pattern, and finished with a large black candle. Closing below $29.10 would support an October top.
-SPY- Prices failed to finish above the 200-day MA. Technically we have an undercut low; prices broke the October 11th low but closed decisively above it. I’d like to see a little more price action before attempting to call a bottom.
-WTIC- Oil was clobbered, and prices slipped below the 200-day MA. The MFI (above) is oversold, and we could see an interim low anytime. Let’s see how prices react tomorrow. Today’s sharp decline could generate a piercing snapback rally, but I’d be surprised if this is the final low; I think we have some more work to do.
I have a few appointments tomorrow but will try and update when possible. Have a great night.