Has dollar bottomed?

Just a short update today. It seems to me like the dollar bottom is near which should put a temporary cap on the rise of GLD and SLV too.

UUP - dollar long

The dollar chart collapsed into the 92-96 sell and then even further to 218-222 sell. The 218-222 bought back the next day and I think this should be the bottom  for a few weeks. It is more probable to first touch the 16-20 echo than to exceed this low on the closing bases. If I am right this should limit the gold rise too and consequently the gold stocks.

UDN - dollar short

Sometimes it is easier to get perspective from the opposite view.

GLD

HUI

Aussie golds

So much potential. 

I am 25% long and waiting for a correction.

The race is on

All my targets for the gold bull market setup have been met. Today's move finalised the setup in a rather perfect fashion and it is time for me to take some profit from the table. I will do it in two steps, Friday and Monday trading day in Australia. I think this move will go higher (HUI 550) but I am happy to reduce my position to 25% long and watch the final push with minimum exposure. I am a long term investor and I will not be in cash at least till 710 days after the May bottom. My exposure will vary from 25% to 100% long and I will often rearrange my portfolio along the way.

HUI
The HUI broke today out of its downtrend line from the 2011 top. The consolidation that I expected around 485-495 didn't last much (I was hoping for a 16-20 buy) which shows that this leg up is very powerful and it could last longer than expected. The main point is that it has proven its impulsive nature and it has signalled the start of a new bull.

GLD
The breakout is confirmed and it is now running into some resistance. I think it will under perform the HUI in the weeks ahead, which is normal at this stage.

 SLV
Up 22% since the 35-39 gave up resistance. What is going to stop it? Probably 36 where some confluence of resistance exist.

 SP500
Repeat from the last week again '... considering the prevailing negative sentiment and the action of the SLV chart I think there is a good chance that after some consolidation this chart breaks north to test the 2008 all time high...'  

 UUP
How do you call this chart pattern? A limp d**k pattern (copyright Branko 2012 )!

It is selling the 92-96 true bull here. It is time for some rally, probably to a 16-20 sell.

GDX
On a true bull and, same as the HUI, still some room left to the upside.

GDXJ
It is on a 92-96 buy and facing some resistance here.

Aussie gold index
It is buying 92-96 today and still has a lot of potential. Next two days I will reduce my position to 25% long and then will be very aggressive buyer when it is close to the green uptrend line.

Good luck to everyone!

On track

In my last two reports I analysed what was needed to get the gold market in a bull constellation. In short the steps are: extended drop to get echoes in proper alignment, failed 16-20 sell to signal the bottom, an impulsive rally to buy the 92-96 and confirm the bottom, a breakout. In any particular application of these rules I will also mix in traditional TA resistance/support lines and reconcile the whole picture with them.

Lets comment on the development over last couple of days.

HUI

The bottom has been confirmed from both aspects, SKI and traditional. The close at 470.36 last night has done two things: 

• it has confirmed the bottom from the traditional TA point of view (in line with SKI that already has done the same). It secured a higher high in addition to a higher low that is already in place.
• Last time I wrote about a possibility of a triple sell if we headed straight down to buy the 16-20 echo. This possibility is now gone, it is not possible any more. The 16-20 is now quite far above other two echoes and PROTECTING the vulnerable spot where the 35-39 and the 92-96 meet. Also, the 16-20 is perfectly positioned to act as a support when 460 level gets tested from above. This is what I call a bullish market structure. There are no week spots and all critical junctures will be supported by this proper index alignment. The other case would be structurally very weak and prone to a failure. 

 What is next for the HUI? Now that bottom has been confirmed the only thing left is to break the trend line at around 480-490 (the SKI breakout has been confirmed). I expect the first touch of this area to produce a significant consolidation that is eventually going to be terminated by a 16-20 buy. This touch is not a requirement though, the consolidation can start at any time.

SP500

Instead of a comment I will just copy a sentence from my last report '... considering the prevailing negative sentiment and the action of the SLV chart I think there is a good chance that after some consolidation this chart breaks north to test the 2008 all time high...' 

SLV

Since its 2 months bottoming process had finished by issuing the 35-39 buy signal SLV has done everything perfect. It is up over 15% and looking healthy. The bottom is in and there is nothing weak in this chart. Is the 92-96 going to transform itself into a true bull or not is not so important. A correction would be healthy. 

GLD

The GLD chart, same as the SLV, looks like a complete breakout. 

UUP

The deeper the UUP goes into that whole below the harder will be to get out without selling the 92-96 bull. It already looks quite impossible.

Aussie gold

I said before that I expect this chart to buy its 92-96 echo in the form of an inverted head and shoulder pattern. Everything seems on track for now but it should be noticed that for Aussies the bottom is not confirmed yet.

I am still 50% long and now very calm to face the correction that inevitably must  come. If we visit HUI 485 first I will reduce to 25% and wait for the 16-20 buy to reload. If not I will go from 50% to 100% long on the test of 450-460 area.