Metals and miners may have topped today, but we won’t know until each close beneath their respective 10-day EMA’s.
The dollar tested the 100 level again, and it should bounce as precious metals correct.
Oil is in a drawn out topping situation similar to that of mid-2015. We may get a decent short play in the coming weeks if the $55.24 high isn’t surpassed.
Follow-through lower tomorrow in metals and miners will be highly suggestive of a top. Gold closing back below $1,200 and silver beneath $17.00 is necessary evidence. However, I don’t plan on trading the move down into a correction (could be tricky). I’d rather wait for signs of bottoming and then begin to buy long-term positions.
-US DOLLAR- When the dollar bottoms (imminent) metals and miners should pullback. That process should last less than two weeks, and then the dollar should rollover until late March.
-GOLD- Prices reached a new cycle high of $1,220.10 on the 25th trading day while nearly forming a bearish engulfing candle. The odds that a top formed are pretty good. Nevertheless, a daily close below the 10-day EMA ($1,201) is required to be sure.
-SILVER- Silver remained below the high set last week, and we need a daily close below $17.00 to signal the correction phase.
-GDX- Prices formed a bearish shooting star today, and that may have been the cycle top. I had to move up the correction box slightly to accommodate for today’s high. A close below the 10-day EMA will verify the top.
-NUGT- Support for a cycle low around $8.00.
-GDXJ- A close beneath the 10-day EMA will confirm that the pullback is underway.
-JNUG- I had to move the correction target up slightly.
-SPY- Prices made a new closing high and follow-through higher tomorrow could signal a new up phase.
-WTIC- Currently, WTI topped out at the $55.24 level, just 7-weeks into the intermediate move (left translated). If prices don’t take out the $55.24 high in the next few weeks, I will use a close beneath the 50-day EMA to enter shorts. In that event, I would expect a drop into late March below $42.00. Closing below the 50-day EMA should signal the start of the intermediate-term decline.
The next few trading days will tell us what we need to know. The correction in metals and miners should end between January 31st and February 3rd.