It appears we are getting a retest of the Mondays lows and I will be watching for signs of bottoming. However, there is the likelihood of an accelerated drop lower if key levels are breached (gold $1,200, silver $15.83). Therefore, I find it prudent to wait for a bullish reversal pattern before stepping in.

Miners have closed five consecutive days below the critical neckline level. The bearish potential rises exponentially with each day this extends.

-US DOLLAR- The consecutive 9-day rally off the lows has reached a new high; the price structure is beginning to look moderately parabolic. Prices are overbought, but it’s possible they keep surging higher without a correction. I’ll watch for signs of a reversal.

-GOLD- Gold could be dropping into the final move lower of this correction. Prices need to hold the $1,200 level – if they don’t, we could see several stops triggered and a sharp decline.

-SILVER- Silver could drop to around $16.00 before finding a bottom. I’ll be watching for signs of a reversal.

-GDX- Prices look ready to test or marginally break below Monday’s low. A sharp move below $20.13 would be bearish. We are at a dangerous point; I’d like to see clear signs of a reversal before I enter partial positions.

-GDXJ- We need to watch the $32.60 – $32.80 level. A sharp drop below those levels could accelerate the decline.

-SPY- Still no signs of a reversal.

-WTIC- Oil prices reversed sharply at the 20/50 EMA crossover. That may have capped this bounce.

I will update during trading hours tomorrow. I’m proceeding with caution until there is a clearly define risk/reward setup.