Other than fed starting an interest rate raising campaign i don't see much stopping a run to 800 - 850 before the end of the year. The fed have communicated that they are not willing to come to the rescue of the dollar. Silver has loads of potential as well IMO.
On one hand, crazy overbought. On the other, HUI just made another 52 week high. Overall, I'd say it's too soon to sell.
It appears that the correction in gold/silver has begun as anticipated. The selling got underway last night just as Asia opened and prices have sunk lower since COMEX opened today. I am still looking for weakness and choppy action in the metals until the end of this month. At which time I will be looking to establish a much larger long position when my signals arrive. We should still look for cash spot gold to test 690-710 area and silver at the 12.50-12.80 range. For gold, a backtest of the breakout point at the 695 area would ideally match what I am looking for since this was gold's previous resistance zone from the past 6 months or so...
I was seriously thinking about shorting gold last night. Too bad I didnt. That would of been beautiful. Well, one opportunity gone, other opportunities coming.
The metals could be getting a head start with a correction in many of the commodity complexes. Energy and Grains have also run up quite a bit in the last 6 weeks and appear to be starting a correction of sorts. The $CRB took a hit today and Crude seasonals target the high range for oil prices right about now. The basis of this correction would likely appear in the bottoming of the USDX. Traders should continue to watch the dollar very carefully for further clues...
The metals attempted to rally today but gold ran into resistance at 735 and silver up to 13.40. The DX continues its oversold bounce and it appears that 80 will provide some overhead in the coming days. If 80 is overcome than there is the possibility that a sharp rally in the dollar can occur since this still remains a crowded short trade. The $XEU has moved sharply lower to under 1.410 in the last few hours so this is important. I continue to expect lower prices among the major commodities complexes over the next few weeks and have planned accordingly as there should be a nice swing low coming in the metals...
its not "my" resistance. any and all markets have an infinite number of support and resistance levels. 735 was just of of many in the current timeframe. Right now 740 is the current level and then the latest swing high of 748. It all about the dollar right now. I am still leaning on a continuation of DX strength through the end of October. There is always the possibility that the DX could rally very strongly and surprise many traders with the force of the rebound. The reason why I say this is because the last few times that the DX was at the 77-80 level, the rallies were very strong. Pull up any long term DX continuous charts and you will see exactly what I am talking about...
Nothing much to add right now except my price and time targets still stand. The USDX is bouncing today and thus pushing the metals and energy complex moderately lower. I will be watching several intermarket developments closer to EOM to gauge whether or not the USDX will continue lower. If the rally in the dollar is swift and pushes the Euro lower in a hurry then we could be witnessing a historic low in the US Dollar. If the DX continues to rally and hits 80 then immediately begins to sell off then the Dollar destruction will likely continue into 2008. Traders should continue to watch the money markets and bond markets for further direction as well. We shall soon see...