The US Dollar broke down sharply today, but I think prices are nearing a significant bottom. Today’s move may be a false breakdown before a sustained move higher. I will be watching prices closely for signs of bottoming this week.

Gold finally confirmed the third daily cycle. Prices are nearing resistance. The dollar and gold have been relatively uncorrelated, but we could see a top in metals and miners if the dollar forms a significant low.

Miners are slowing, and the rebound may be over. Nonetheless, closing above Monday’s highs could extend the rally. I will continue to monitor prices for strength/weakness.

SPY closed above the 240 level, but I do not see breakout activity. Prices should rise on significantly higher volume during a legitimate breakout; they haven’t.


-US DOLLAR- The dollar threw a curveball by breaking below the lower boundary of the wedge pattern. However, I think the breakdown will be short lived. Today is the 35th day of the current cycle. The previous cycles bottomed around day 37. I suspect we are approaching a significant low, similar to last August. Note: A breakdown in MACD would change my mind.

-GOLD- Prices confirmed the third daily cycle low. It’s possible gold tops if/when the dollar bottoms. If prices rally further, I’d be surprised if they make it past the $1,245-$1,250 resistance area.

-SILVER- Prices are meeting resistance between $16.80 and $17.00. If the bulls can carry prices past $17.00, we could see an extended move to around $17.30. I suspect the $15.80 support level will be tested in June.

-GDX- Yesterday’s black candle formed in the ideal range for a rebound high. Closing below $22.30 should be enough to confirm an interim top. However, the rally may extend if there is a daily close above the black candle high of $23.13.

-GDXJ- A daily close above the black candle high of $33.28 could extend the rally. I will be watching for a close below $32.00 to signal a top to this rebound.

-SPY- Prices closed consecutively above the 240 level. However, a breakout is yet to be confirmed. Significantly higher volume should accompany a real breakout. Until that occurs, prices could remain trendless.

-WTIC- Prices spiked to resistance (50-day and 200-day MA’s) yesterday. There will be a struggle to retake the 200-day MA. Closing back below $47.50 would be the first sign of weakness. If OPEC doesn’t extend production cuts next week, dropping below $42.00 becomes likely.

I think the dollar might bottom later this week. I will watch prices carefully and advise if I see a possible low.

I will reassess short trades in metals or miners if I see clear signs of a reversal. Otherwise, I’m content waiting to buy at the next 6-Month cycle low.