Gold And Miners Remain Below Last Week’s Highs

Gold and Miners remain below last week’s highs, and the potential for a deeper correction remains. Gold continues to probe support around $1,220 and breaking below it could trigger a quick sell-off. IF a meaningful correction has begun, we should see a recognition day sometime this week. A recognition day denotes, persistent, all-day selling as investors try to exit with max profits. A 5+% down day in miners would qualify.

We remain in no man’s land until prices break above or below last weeks extremes. I will watch and update when a breakout/breakdown becomes apparent.

-US DOLLAR- Prices continue to rise, but precious metals are yet to react to the dollar’s strength. We should see prices begin to stall between 101.5 and 102. I fully expected gold and silver to correct during the dollar’s rebound. I’m not sure why the stock market, gold, and the dollar are all trending higher, very peculiar.

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-GOLD- Prices keep testing the $1,220 support level and have managed to hold it thus far. A daily close below it will imply that a larger correction into late February early March is taking hold.

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-SILVER- Prices managed to make another marginal high without gold. Closing below the 10-day EMA ($17.68) should mark a top.

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-GDX- Prices came within a penny of breaking Friday’s low and $25.71 could mark a top. However, I would like to see successive closes below the 10-day EMA before I call a top officially.

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-GDXJ- Prices bounced off the 10-day EMA as eager buyers came to the rescue once again. It would take a close below the $39.30 gap to propose a top at $43.01.

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-SPY- Prices continue to rally, but volume is anemic. We could see an interim top form within the next week or two.

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-WTIC- Prices reacted at the trendline, and I’m still holding 25% of my short position. Prices need to close below the lower trendline to generate sustained selling pressure.

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I’ll update potential correction targets if prices break lower this week. The next cycle low should arrive in late February or very early March.