Markets reversed somewhat overnight, and it looks like the dollar is breaking down.

Gold is back above the Fed announcement level, and prices look poised to exceed yesterday’s high ($1,262.20). Remember, key resistance continues between $1266 – $1270. It would take a weekly close above $1270 to support a year-end run to $1300 – $1310.

A little trick I like to use is marking the price extremes immediately following a Fed decision with arrows. It helps me determine the short-term trend. In this case, gold hit $1258.40 on the high side and $1246.30 on the low side. Follow-through above or below the arrow suggests the true trend. Currently, gold failed to follow-through to the downside and prices are above the $1258.40 arrow, indicating a possible reversal.

Same with silver – prices are testing the green upper Fed announcement arrow.

Yesterday’s massive high volume selling day in miners almost always signals a top. I’d be surprised if prices exceed yesterday’s highs. Nevertheless, I’ll keep my stop on JDST at breakeven. I don’t want to mess around too much with these markets.

It looks like the volatility may carry over into today and possibly tomorrow. Hopefully, by Friday afternoon the erratic behavior will dissipate.