Dollar Ducks, Gold Quacks

This morning in the Daily Market Report, we showed a series of charts on the dollar indicating a correction phase.

A big picture chart from January 1973 through November 2016 shows a reaction is in order with the dollar testing a major declining trendline.

Notably the recent advance started from an undercut of major lows: a Bear Trap.

On the very short term, yesterday, the dollar backtested its overhead 20 day line (Holy Grail) and this morning the Daily Swing Chart turned up and the dollar is rolling over (for the moment).

This is bearish behavior and suggests that the Pinocchio of the intersection of the channel and Live Angle from the earlier 2016 daily dollar implies at least a multi-weak reaction.

Moreover the dollar is in the WEEKLY Plus Two/Minus One Buy position so a failure to get upside traction here suggests a pullback to the 97-98 range.

This is important for gold/gold miners as we our work has been suggesting a cycle low.

The first step in this potential low was the breakout in the hourly GDXJ flagged earlier this week.

The character and structure of a rally here in gold and gold miners will be important to determine the nature and potential of a leg up.

Why?

Because I find it hard to believe that after such a deep bear market in the miners from 2011 to last December that this years first half huge runup was a solitary leg.

If I am correct we are on the cusp of a big rally in the miners which is consistent with the dark sentiment over the last month.

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P.S. Jeff Cooper is CRUSHING the market. Click here to learn more.