The next 72-hours are critical. It seems nearly every market is at a significant tipping point. Tomorrow’s Fed decision will either extend or reverse the current trends. Expect increased volatility.
-GOLD- It looks like prices are trying to break higher from the small bull flag. Resistance coordinates between $1258 – $1270. If we are going to see a top within the next 72-hours, it should appear among those numbers. Finishing the week above $1270 would extend the rally and support a test of $1300 – $1310 by year-end. That would likely be the result of an overly accommodating Fed.
-SILVER- Prices remain within the 4-month range. As I said, it’s been best to sell breakouts and buy breakdowns in silver over the last year. I don’t think that has changed. Consequently, a spike above $15.00 after the Fed announcement could turn out to be another trap. I’d need to see a sustained breakout above the 200-day MA to convince me of a renewed bull phase. A breakout above $15.00 that slips and closes back below $14.80 would become an opportunity to short.
-GDX- Miners made new closing highs on decent volume. Prices are very close to vital resistance. I was a little surprised by yesterday’s strength. It was probably due to weakness and new lows in the general stock market, but I can’t rule out front-running. Front-running is when traders get wind of a significant change or outcome and begin buying before the announcement. The next three trading days are crucial.
-GDXJ- Volume picked up, and juniors finished 3.53% higher. I can’t tell if this is traders front-running the Fed or safe-haven capital. We should know by Friday.
-US DOLLAR- It seems every market is entering the Fed meeting at a significant crossroad. The dollar created an ascending triangle over the last several weeks and prices will either break higher or lower depending on the Fed.
-SPY- Stocks are very close to the long-term trendline as well as prior support. If prices breach the trendline (probable), I’ll watch for an undercut of the February low. Support resides between 247 – 252.
