I get the sense that gold and miners are at an inflection point. The miners are storing up energy for a sharp move and need to break recent resistance/support for a direction. Gold prices have traded below the $1,200 level for 6-days and desperately need to retake that level by the end of next week. If they don’t, then the probabilities of a drop back to $1,050 become genuine.

-US DOLLAR- We are still waiting for the dollar to close beneath the 10-day EMA to signal a correction.

-YEN- The Yen is holding at the 61.8% retracement level but still no signs of a price reversal.

-TLT- Prices tested the trendline and managed to close above it. We may be close to a bottom; I’d like to see a close above 119 tomorrow to increase those chances.

-GOLD- Gold dropped to a low of $1,162.20 and bounced slightly from that level. Still no signs of a reversal. The odds of a drop to the $1,000 level grows each day prices remain below $1,200.

-SILVER- Prices were unable to close higher for the fourth consecutive day, and we still need a close above the 10-day EMA to signal the potential bottom.

-GDX- Prices appear to be storing up energy for a sharp move in either direction. If prices breakout and trade above $21.21, then the move will be higher, and we will retest the neckline at $22.50. If the $20.13 low fails to hold, then the move will be lower.

-GDXJ- Same with junior miners. A breakout above $35.38 should lead to a sharp rally higher. However, if the $32.80 low fails, then the sharp move will be lower.

-SPY- Prices produced a bearish engulfing pattern yesterday and closed just under the 10-day EMA. This could be the start of a correction or possibly more.

-WTIC- OPEC surprised me and reached an agreement to cut production by 1.2 million barrels per day. Prices rallied 13% on the news. The head-and-shoulder pattern was invalidated, and I removed the $35.00 target. I’m unable to get hyper-bullish on oil prices and think that inventories will continue to rise.

OPEC members have a track record of complying to only 60% of their accepted production cuts and Russia just reached record production levels. The American frackers will ramp up at these prices levels, likely offsetting any cuts by OPEC. Essentially, OPEC has given market share to the Americans, and that just doesn’t make sense.

We should still see a seasonal low in January, and I’ll watch the charts for signs of weakness.

The nonfarm payroll numbers come out tomorrow at 8:30 AM. A remarkably high number (>250,000) could send metals sharply lower. I’ll update tomorrow if a significant move develops.