Mid-week update
2012/10/18 at 2:45am NYT


Dollar still needs to fill it's recent GAP on 1H. GAP close has been cancelled in the last 3 hours. Effect of rising dollar was not too dramatic, however it delivered an exhastion candle on gold. Most probably dollar stsarted to make a bottoming process meaning to forma bottom first, then a slight bounce, then breach of recent bottom just before a strong rise. I estimate this process to be completed within the next 2-3 trading days.


RUA 2D shows a textbook sample of a fake bull. I gave a clear explanation how to read that. If a fake bull is forming on RUA 2D, most probabliy it will send dollar up, and PMS will drop again. Decline on stocks and PMs will result a new bearish volume cycle in miners. Our framework of expectations started to be real.


Gold still runs it's bear cycle. While long oscillator is on 0% level, short oscillator is -14%. Long hist continued its decline while SBV flow still shows negative result.

Miners surprise us: recent bear is easing, Mclellan became positive, also long histo lost from its bearishness. Same happened with SBV Flow and oscillators are in sync.As long as oscillators are in negative territory and selling volume is above buying volume miners are not safe. It was wise to drop a small portion of our stakes yesterday. I still see a fake bear forming on junior miners. Price manifestation of current bear was not too strong so far.


Bonds are running their short-term bear cycle but long oscillator is still +1% and moneyflow shows no decline. Also, SBV flow remains slightly bearish only.

Trading update: Hold our reduced stakes and weather the high probability upcoming bear. ECBs might cancel that dollar bull and surprise bears, locking frightened bulls out of an initial trend-change.

Good luck!

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