This Afternoon I would like to show you the very long term chart of the US Dollar that goes all the way back to 1986 where it topped out at 160. As you can see on the chart below it has been in a confirmed downtrend that is still on going. What I want to focus on is the blue downtrend channel that began in 2000 at 120. The top and bottom blue rails are perfectly parallel with each rail having two hits on them. Now I want to focus your attention on the red horizontal pattern. At this point the only thing I can name it is a 2 1/2 double top. I’ve seen this pattern on other stocks that can show up at a bottom also. Whenever I see a horizontal trading range like this, similar to a rectangle, I always put in a center line in the middle of the consolidation pattern. This is the thin red dashed horizontal line. You can see how this center rail has halted the advance in the dollar since 2011 with the last touch about 2 1/2 months ago at the 82 level. The dollar is currently trading just under 80 so we are nearing the strong resistance points where the top blue rail of the center downtrend channel and the red dashed horizontal rails converge, green circle. The red 2 1/2 top halfway pattern has a measured move down to 52 sometime in 2015 which is only 3 short years away. A subscriber asked me the other day what will it take to finally get the precious metals stocks into rally mode. This long term chart of the dollar is your answer. We are within one or two points of reaching the strong resistance point at 82. As the dollar is looking for a high right in here I think the precious metals stocks are looking for a low right now which makes perfect sense. Jim Sinclair used this chart several years ago in one of his commentaries on the US Dollar. As this is a long term monthly chart its still the same chart with only the red halfway pattern developing within the blue downtrend channel that is new. One last note on the dollar chart. There was a bullish rising wedge that formed as a halfway pattern back in the late 1990?s that measured to the last major top in 2000.

all the best Rambus

Goro is bucking the trend today and is getting ready to breakout of a bullish falling wedge. The neckline held support yesterday which is what we like to see. I would like to see a nice pick up in volume when GORO breaks the top red rail of the bullish falling wedge. These stronger stocks will lead the rest higher when the time is right.

The XAU is showing our uptrend channel is still intact and there is a strong possibility that we are forming a triangle consolidation pattern. We have 3 confirmed reversal points so far in the development of this triangle with the 4th and most important reversal point just about finished. You can see where the top blue rail of the triangle and the bottom black rail of the uptrend rail intersect at 192. I would view this triangle as a halfway pattern to the upside. The blue arrows is how I would measure the price objective. We may have another day or two to complete the red triangle and start the next leg up. Remember consolidation patterns are a fight between the bulls and the bears until one side wins out. The odds favor an upside breakout as the XAU has been in an uptrend since the first of the year. I know it doesn’t seem like it but that’s what has been happening. Two steps forward and one step back.