10:54 am PST. GDXJ tried for the fourth time today to move above the 200sma, but still finding a lot of sellers. I think we just saw an interim high for the mining stocks and I expect to see a pullback to the 21sma at around 34.50, by Friday.

Bonds are also selling off, which is good for stocks. With gold and bonds pulling back, it is all clear now for the indices, Russell and XLF in particular, to make new highs.

7:23 am PST. The mining stocks are having a nice rally this morning. I scaled out significantly my positions and I might exit completely before the lunch hour. GLD is going higher on negative divergence and it looks to be topping here.

The dollar futures index made a new low in overnight trading tagging 99.885, while gold made a slight new high. It is too early to tell whether this is the low for the dollar. I changed my mind about the dollar not filling yesterday’s gap down anytime soon. After seeing the overnight action in the dollar, there is a possibility the dollar could rally here. It will all depend on my support points and pivots.

I lightened up on my mining stocks for now until further confirmation of a rally. This also could have been the wave v that I had thought was also a possibility.

/NQ this morning also looks set to make another high. Nat gas looks like it bottomed yesterday.

1:02 pm PST. We had about 1.3 million shares of GDX block traded in the last 30 minutes of the trading session today at 23.76-23.78 and we closed above. GDX also closed above on the 161 ema on higher volume, which to me is a big deal because the 161 ema has been resistance this whole month. The RSI on GDX is never went above 70 which means wave 3 is still to come. The dollar sell off looks like it still has more to go. I remain a bull on the gold mining stocks.

11:50 am PST. NEM is behaving really well. It doubled back tested the downtrend line from July. Then it just backtested the resistance line from November-December and held it as support. It bactested the 8 ema this morning. Now it is trading above the 4/8 emas. If we close above the 4/8 on the day chart. There is going to be plenty of upside in NEM.

9:01 am PST. We could see at the end of December 2016 that the dollar was making marginal new highs on increasing negative divergence on all time frames. I wrote that rallies end on negative divergence and presented detailed charts on multiple time frames the mounting negative divergence in the dollar etf, UUP. I left open the possibility of one more high, but that if the dollar did make a new high it would be the ultimate sell signal. Last Friday we saw unusually high selling volume in UUP and we can see this morning the UUP has gapped down. I do not think this gap will be filled any time soon and that the dollar may have just seen a long-term top.

8:53 am. This morning’s pop higher was just a head fake and the Nasdaq is headed lower, possibly much lower. The first level of support for QQQ is going to be the bottom of the channel around $121 by the time it gets there. It will probably break down from this trendline, judging from my own wave count. The next channel support is at about $114. I think the indices are going to be in corrective mode the entire year of 2017. I closed out my FCX this morning for a small gain and added to my GDXJ swing from last Friday. I think gold is going much higher from here and the retracement wave 2 is done. Being long gold is effectively short the Dow.

update: 6:18 am

indices are perking up. There might be another rally to new highs, with GDX retracing back to the 21 sma. Two scenarios. If GDX breaks and closes below 23.10, then I think the retracement is in play.

/gc pulled back to the 1210-1212 area this morning that I expected. I think we will likely rally to 1224 and then we will see. The indices are probably going to feel very heavy today and probably are not going to move a whole lot.

5:31 pm PST. Gold and silver futures are popping higher while the Dow and Nasdaq futures are down along with the dollar. We saw those prints on UUP Friday afternoon that we closed below and we can see the selling in the dollar continue this evening. I expect a slight pullback in /GC to maybe the 1212 area in the pre-market session and then a rally to 1224. I think gold could be entering wave 3/(3) up, which means very strong buying for a prolonged period of time, and shallow-short retracements. Every dip will be bought. We ought to see increased volume on these moves up.

I did think last week that the Nasdaq looked toppy. Again, I am calling a possible top and I expect a serious pullback could take place in the indices in the coming months. I will do an analysis tomorrow of where I think support could take place. I am looking at possibly 4700 in the Nasdaq.

FCX might just have given a green light today. I bought FCX and will swing it over the weekend. It is slowly stair stepping higher. It also closed above the 4/8 emas on higher volume which is what I like to see.

UUP closed at $26.03, which is below the bulk of the prints and would normally be bearish. It also closed below the 4/8 emas on much higher volume. I am bearish the dollar. I have still have longs on GDXJ, although lightened up on my positions. I will add if GDXJ can break above 23.45, otherwise, I will continue to look for the retrace back to the 21-sma day.

QQQ looks like it could have another last shot to the upside to $124.

I am going to take this weekend to rest. I have been under the weather this whole week – caught something from my daughter.

Ciao! Happy trading.