E Breakdown Confirmed

Yesterday’s key reversal and today’s follow through strengthen our primary outlook. Metals and Miners should work their way down into the much anticipated and 6-Month cycle low. The curveball manifested during an extended cycle in gold, creating a double top. Bulls were caught offsides expecting an immediate breakout.

Gold - The chart doesn’t show it, but gold closed below the previous $1,265 breakout level. Prices should work their way down to the lower trendline before generating a bounce. A failed daily cycle should break the cycle trendline and drop below the previous daily cycle low (DCL). Note: The 6-Month low could arrive sooner if Gold slices through the trendline and falls below $1,214 (prior DCL) without bouncing.

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XAU - Prices should work their way lower towards the 77.50 support level. From there, we could see another bounce before prices break below 77.50.

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GDX - Prices finally closed below the $22.50 support level. We should see the $21.00 level examined shortly.

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GDXJ - Prices should break (close below) the trendline and test the $27.37 low before the next potential bounce.

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DUST - A run back towards the 200-day seems logical.

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JDST - A run back towards the 200-day seems logical.

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The decline into the 6-Month low could take many forms. How gold responds to the intermediate trendline (around $1,230) is vital.

Disclosure: None.

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