MORNING UPDATE 8:43 AM

 

Everything seems to be trading higher this morning – Gold, Silver, US Dollar, S&P 500, and Oil…all up. Several of these are inversely correlated, so it is odd to see them trading higher together. That usually indicates a false move in one or more of the above assets. We should know which market is wrong by lunchtime.

Volatility in gold is expanding, and we have a potential broadening formation. Prices would have to break sharply above the upper boundary (around $1324) to support more immediate upside. A decline below $1313 would setup another test of the lower border around $1302.

Silver requires a sustained advance above $15.85 to suggest a potential upside breakout. Otherwise, the short-term pattern will continue to make lower lows.

Below are the one-hour charts for GDX (top) and GDXJ (bottom). To support an upside breakout, GDX requires a sustained rally above $22.50. Junior miners (GDXJ) is a bit more volatile and requires a move above $32.80.

I’m temporarily removing my stops on JDST and DWT until I see how things shake out this morning. I suspect that by noon one of the markets that are currently higher will have faded.