Miners exploded higher from the 3-week consolidation invalidating the bearish descending triangle. The huge volume gap higher resembles a recognition up day. How prices respond between now and Friday will either confirm or deny a breakout. I summarize two scenarios at the end of today’s report.

I expected gold to throw us a curveball. I’m not sure if we’re seen it now amidst an extended cycle or if the curveball was an unorthodox 6-Month low in early May. If it’s the former, metals and miners, need to top this week. My call for lower prices is on life support.

I will continue to update throughout the week. Needless to say, I’m sitting on the sidelines until a clear risk-reward scenario presents itself.

-US DOLLAR- Still no sign of a bottom for the dollar. When it finally catches a bid, we could see a sharp reaction.

-GOLD- Prices made a new closing high. Either this is an intermediate cycle extension or gold put in an incredibly shallow 6-Month low that never produced a failed daily cycle. Prices should top by Friday if this is a stretched 6-Month series.

-SILVER- Prices closed above the 200-day MA, but they remain below the April high. If the gold cycle is extending, silver prices should top with gold by Friday.

-GDX- Prices exploded higher invalidating the descending wedge pattern and nullifying the May divergence. However, the longer term divergence from February remains. The upper trendline must hold, to maintain our outlook for lower prices. If prices gap through the upper trendline with ease, I’ll concede a breakout in miners and look to buy long positions. Note: There was selling into strength today.

-GDXJ- Juniors charged higher on large volume. Prices are at the trendline and could breakthrough tomorrow. I might buy a breakout if the structure looks right. I’ll update members if I take a position.

-HUI:GOLD RATIO- The HUI:GOLD ratio would have to breakout above the upper trendline and defeat the 200-day MA to end the 9-Month consolidation. I that occurs, I’ll look to buy gold, silver, and miners.

-DUST- Prices broke sharply below the trendline.

-JDST- Prices gapped through the trendline and dropped to fresh lows.

-SPY- Prices are pulling back after reaching news highs. Support is at 241. Prices should still reach the 246+ target before entering a deeper correction.

-WTIC- Prices look like they are consolidating before another drop. Consecutive closes above the 10-day EMA would challenge that view.

I see two possible scenarios.

• Scenario 1) The 6-Month Gold cycle extended and prices will top this week.
• Scenario 2) The 6-Month Gold cycle arrived May 9th at $1,214, and prices are on the verge of a breakout above the 5-year trendline.

Scenario 1: If prices are following scenario one, we should see a top this week, a correction, and then a failed daily cycle.

Scenario 2: The 6-Month Gold cycle bottomed prematurely, May 9th at $1,214. If this is the case, prices will breakout above the 5-year trendline and confirm a new bull market. I’d need to see a weekly close above $1,310 to endorse this situation.

Either scenario has advantages. Scenario 1 will present a better buying opportunity later this year. Whereas, scenario 2 will confirm a new bull market and a long-term series of higher high and higher lows will begin.