Previously I noted that I wanted to see silver prices close below $15.80 on a weekly basis to be confident that the 8-year cycle forces are in play. Silver reached $15.68 and then reversed making a bullish hammer. We could see prices rally for a few days; I’d like to see silver remain below $16.80. Prices dropping below today’s low ($15.68) could lead to a heavy selling.

-US DOLLAR- The dollar closed higher again, but prices are struggling with the 103.50 level. We are 8-days into a new cycle and prices should trend higher into the first week of January before dropping into the next cycle low.

(Click on image to enlarge)

-GOLD- Gold bounced off $1,127, but it would take a close above the blue trendline to neutralize the daily downtrend.

(Click on image to enlarge)

-SILVER- If this is just a bounce I’d like to see the rally stop below $16.80 and last just a few days. From there we could see a sharp decline below today’s low. Prices rebounding strongly above $16.80 would imply that a significant low may have been struck.

(Click on image to enlarge)

-GDX- Prices may bounce to close the gap at $19.81 before heading lower. Prices closing above $20.50 would suggest that this is more than a rebound.

(Click on image to enlarge)

-GDXJ- Prices challenged the trendline but managed to close above it. Prices could bounce to the gap at $30.54 before another drop. A close above $32.00 would mean that this is more than just a bear market rally.

(Click on image to enlarge)

-SPY- It looks like stocks consolidated for a few days and may be attempting another run higher. Hot money is still flowing into the stock market.

(Click on image to enlarge)

-WTIC- Crude oil is holding above the red support line. However, the COT numbers are reaching levels where a correction often begins. A close back below the $52.50 level will be the first indication that a correction has started.

(Click on image to enlarge)

It looks like precious metals, and miners may bounce for a few days. The previous corrections/consolidations persisted for several weeks before dropping to new lows. This one may last less than a week before renewed selling pressure.

Silver dropping below today’s low could lead to a significant decline. If we are dropping into an 8-year cycle low, silver should begin to outpace gold to the downside.

Trading volume will be light as we head into the Holiday. I’ll watch for signs of strength/weakness in metals and miners and update if needed. I plan on enjoying the Holiday and not trading unless a quality risk reward setup reveals itself.