Metals continue their rebound. The rally in miners lacks conviction and trading volume is light. We still expect another decline in metals and miners.
10-year Treasury yields dropped to fill the June gap after breaking out. If yields bottom and begin to rally, metals and miners should start to rollover.
-US DOLLAR- Prices dropped to the measured move target and examined the 94.00 level. The short-term cycles should begin to turn up. A daily close above 95.00 is necessary to initiate a bottom.
-10-YEAR TREASURY YIELDS- Yields pulled back to fill the June 29th gap. Closing back above the 200-day MA (22.80) could spur another up leg. Gold prices should soften as yields rise.
-GOLD- Prices are testing the upper range of our primary resistance box. A daily close above $1,250 could stretch the rally towards $1,260 – $1,265.
-SILVER- Prices are inching their way into the resistance box. The next swing high should flag the end to this rebound.
-GDX- Miners closed above the 50-day EMA. There should be notable resistance between $22.40 – $22.80. A swing high in that area should cap this rebound. Volume has been thin during this recovery.
-GDXJ- Juniors continue to struggle at the 50-day EMA. Volume has steadily decreased since the July 10th reversal. The next swing high should identify a top.
-DUST- I will consider entering a small position in DUST IF prices form a swing low between $28.00 and $29.50.
-JDST- I’ll consider opening a position in JDST IF prices form a swing low and maintain the trendline.
-SPY- Prices closed above 247, and a test of the 250 level seems logical before sellers step in.
-WTIC- Prices reached $47.74 and formed a reversal candle. A daily close below $46.81 would produce a swing high. However, I’d like to see prices close back below the 50-day EMA ($46.53) before considering a top.
-XLE- Prices attempted to breakout gapping above the trendline this morning. Sellers came in and pushed prices back down into the close. Closing below $65.58 will form a swing high and likely end the rebound in oil.
I’m watching for signs of topping. I will keep members informed concerning DUST and JDST. I’d like to see a swing low form in 10-year yields or an official swing high develop in gold before scaling into shorts.