When gold reached our short-term target of about $1200, we closed our gold and silver futures trading positions. We have since been looking to reenter our long gold and GDXJ junior gold miner trading positions whenever gold traded close to its 10 week (50 day) moving average (currently around $1102 and rising about $2 per day), and we did so on Friday at equivalent to $1110 spot when gold came within less than one percent of its 10 week moving average. We keep our long term investment position in gold at all times, but the odds absolutely did not favor maintaining our long trading position when gold was stretched about as far above its 10 week moving average as it normally ever gets. However, at this point, odds again favor holding a long trading position as the short-term correction in gold likely has hit bottom or soon will do so around $1080 or higher

U.S. and World equity markets are presumably still in multi-year downtrends. When the S&P 500 Index validly broke the 300 day (65 week) moving average, we stated that this indicated the move up would continue higher. It then pushed into the next significant resistance range from 1070-1140, and recovered almost 50% of the 2007-2008 decline (the halfway point is S&P 1120), which is approximately where corrective moves tend to top out. We believe a significant correction or a second major phase down is likely to begin at some point during the winter, and we may short the S&P futures if the S&P has a surge up toward 1140.

Of great long-term significance, gold successfully broke out of a 19 month long base when it had a weekly close at $1048. Gold now has expected major support between $1033.90 and $978. A weekly close below $970, while not expected, would indicate a failed breakout. The short-term correction in gold is likely either complete or soon will be around $1080 or higher, and we expect it to move much higher over the coming months and years. Only a close below $1080 would make us favor a deeper correction toward $1033.90 - $978.

Increasing the odds that the major bull market in oil that began in 1998 has resumed is the fact that the 10 week average (green) has crossed the 43 (blue) and 65 (red) week moving averages to the upside. From 1999 to 2008, that always indicated a resumption of the secular uptrend. If crude oil breaks $80 by at least 1 percent on a weekly close, a new major uptrend is very likely underway. Should oil have a weekly close beneath the long term moving averages, prices could decline anew.

The CRB Commodity Index has confirmed it is likely back in a primary uptrend as its 10 week moving average has, as with crude oil, also crossed the 43 and 65 week moving averages to the upside. The CRB Index is near an almost perfect setup for going long.

The US Dollar (as measured by the US Dollar Index) may eventually be headed for a test of the all-time low of 70.70 recorded in 2008 after closing 1 percent below the late 2008 low of 77.69. A weekly close at 82 or higher is needed to resume the larger uptrend from March 2008. The next major support is around 74 at thick green line, and the dollar appears to be turning up for at least a short-term rally from that crucial level. Likely target is the 78-81 area.