There were increased signs of topping in Metals and Miners today. Meaningful follow-through to the downside tomorrow will increase the odds of a cycle top to about 90% (currently 60%). I’d also like to see the dollar close back above the 100 level before labeling its cycle low.

Once the highs in Gold and Silver are confirmed, I’ll begin drawing up sensible targets for the next cycle low.

Metals and Miners are notoriously tricky at cyclical turning points. It’s best to wait for confirmation before committing to a trend change.


-US DOLLAR- The Dollar closed above Monday’s high forming a swing low. A daily close above the 100.00 level (roughly the 10-day EMA), will confirm a dollar cycle low.

-EURO CURRENCY- The EURO gapped up Monday to touch the 200-day MA. Prices then closed today below the start of Monday’s gap. This is often referred to as an exhaustion gap, frequently seen at interim tops.

-GOLD- Prices formed an inside-day (a reversal day when prices trade within the previous day’s range). $1,261.00 could be the cycle high…if prices close beneath $1,245 tomorrow (without first exceeding the $1,261 high).

-SILVER- Prices ran just above my resistance box but arrived at the trendline from last summer. Closing back below $18.00 tomorrow will support a cycle high.

-GDX- Prices closed just below the 10-day EMA. Follow-through lower tomorrow will support $23.56 as the cycle high. However, closing higher tomorrow could lead to more consolidation.

-GDXJ- Junior Miners are trading below the rate hike spike high. A sign of relative weakness as gold and silver reach new highs. A top is likely. Follow-through lower tomorrow will confirm a cycle top. However, closing higher tomorrow could lead to more price consolidation.

-SPY- Stocks reached an interim low, I expect a bounce from here; potentially to new highs. Closing below Monday’s low (231.61) would likely lead to a decline to the trendline and 200-day MA.

-WTIC- Oil prices have bounced three times off support at $47.00. If prices close tomorrow above $48.70, we could see a bounce back to $50.00-$51.00. In that event, I would take profit on 75% of my short position. Conversely, a daily close below $47.00 will resume the downtrend and lead prices to $42.00, with the potential of reaching $35.00-$37.00 if the selloff accelerates.

Follow-through lower tomorrow will support cycle highs in Metals and Miners. However, Metals and Miners closing higher tomorrow will drag out the topping process.

I’ll update Members in the morning.