Good Sunday to you. Here are the links of the week.... 
 

Gold Miners Hold Support in Bullish Fashion
Gold stocks are holding initial support and holding the bulk of their gains. If that continues over the next few weeks they could be in position for an end of year rally. 

Precious Metals Video Update
This is from Wednesday.  

Why are Precious Metals Declining?
Tiho Brkan's latest thoughts on the precious metals sector. The key is the 200-dma. 

Gold Stocks: Different this Time
Great post from author Gary Tanashian. One of my favorite analysts to follow.     

Surprisingly Strong Charts
Economic update from the blog of economist Scott Grannis.  
 





Premium Snippets 



The US$ index surged after testing support at 94. Its been in a range from 93 to 100 and has held its gains in very bullish fashion.

Pure technical analysis concludes that it could be forming a bull flag type of pattern and projected upside would be to 120 (assuming a strong break above 100).

That would fall in line with the US$ bull analog chart. A push higher to 120 and a top in 2016 appears reasonable... 
 

Meanwhile, the gold stocks failed to break lower last week and could be setting up for a strong move higher. They need to hold the lows for another week or so which would put them in position to launch higher. 

Below we show a daily chart of GDXJ. We already noted a potential measured target of $28. That happens to be a confluence of major resistance as you can see below. GDXJ is also testing its 200-dma for the first time in over a year. If GDXJ breaks the 200-dma then we would anticipate it rising to that $27-$28 target. A move to $27 would be a 50% move (from the summer low) which is inline with previous rallies. The rebound would likely correct and consolidate after reaching the target which is also right at the 400-dma (which has provided critical bear market resistance for the miners since 2011). 



 



Another thing to note is the Gold/Gold stocks ratio, which we plot in the chart below. We use the Barron's Gold Mining Index. The fact is, this ratio went parabolic and into blowoff mode earlier this year. Look closely what happens to the ratio following spike peaks. 







But what about the bearish CoT? What about the US Dollar?

In TDG #436, a 32 page update sent Saturday, we shared some thoughts on how things could play out. We don't make predictions, we only try to compile as much facts and data as we can and then try to anticipate the probable scenarios. I'm very happy with the update as I think it provided very useful charts and analysis. 

The one thing I will say about the CoT, is that whenever the metals decide to go into a new bull market (and takeout their 400-dma's), the CoT will probably look bearish. I'm hoping that gross longs will capitulate and make it easier to sense the turning point but that may not happen. At somepoint the metals will move back into a bull market and sustain it, amid relatively high net speculative positions. 


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