The HUI is coming unglued on the charts with the index falling below long term chart support at the 200 day moving average in today’s session. It had not been below that key technical indicator since early February of this year.

We are also now seeing the 50 day moving average and the 100 day both moving lower. 

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More importantly, the ADX line, is now beginning to rise as the price moves lower. This is ominous as it suggest, NOT CONFIRMS – that the possibility of a trending move lower in the shares is underway. 

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The index is a mere 6 points away from having retraced exactly half of the entire move up this year. You can see that 50% Fibonacci retracement level coming in near 192.

That really is the last line of defense for the bulls. They either hold it there or it is non unreasonable to expect a move all the way back down to 170.

The other problem with the mining share weakness is that it is telegraphing more losses in the gold price itself. Look at how sharply the HUI/Gold ratio is now falling. 

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The one saving grace that I see in the gold area is the fact that the reported gold holdings in GLD have yet to experience a substantive drop. Look out if that starts to happen.

We have a payrolls report due tomorrow morning for the month of September. If it is strong, gold is not going to hold. The only hope for the bulls right now is that the report is weaker or weaker than the average pre-report guess.

By the way, First Majestic, cannot get any upside traction. 

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This suggests that silver has further yet to fall.

It is amazing to me to watch a stock lose 60% of its value in the matter of 2 months.

…related:

Former Soros Associate Says Fed Responsible For Gold & Silver Smash

We continue to forecast a drop in the commodities complex over the next few months with the possibility of some important lows next year. WTI is still putting in a top, the dead cat bounce that has lasted throughout this year is running out of steam and we should see the push for lower lows over the next couple of months and in to 2017.

We continue to forecast a period of Dollar and Yen strength over the next few months which will have an impact on many of the markets we forecast. The Dollar will continue to advance against Sterling, we are forecasting the Pound to be the weakest of the major currencies going forward.

We are forecasting a correction in global stocks over the next six months, we think the SPX along with most of the major indices has either put in a top or is in the process of topping out. This fits in well with our commodity and forex forecasts.

We are currenly expecting a new down leg in commodities, a stronger Dollar and an even stronger Yen during the fourth quarter of this year. we anticipate these dynamics will create the conditions for some key markets to sell off for a period which will relieve some over bought conditions necessary for a healthy market.

Taking patterns in nature that repeat over different time frames like fractals as the basis for the forecast methodology, our forecast patterns can last for months and years, we create a most probable long term fractal pattern and then continually test it and model it over multiple time frames to ensure the pattern remains a probable event.

You can follow our short term forecasts on our web site

…related:

Not Even An OPEC Deal Will Stop Oil Going Lower, Goldman Warns

OPEC shocked the oil markets on Wednesday, moving past their differences to agree on the first collective production cut since the global financial crisis. The surprise agreement sent oil prices skyrocketing by more than 6 percent.

The announcement had such a strong impact on oil prices precisely because a production cut was not thought to be under consideration. The meeting had been billed as “consultative,” that is, not a meeting where decisions would be made. OPEC officials also said that the deal that was on the table was just for an output “freeze,” not a cut. If OPEC wanted to signal to the world that it could still function as a group and was still relevant to the oil markets, it succeeded.

….continue reading HERE

…related:

Did OPEC Just Spoof The Shorts?

Having been bullish for nearly half a year, yesterday Goldman’s flipped again, when it cut its Q4 oil price target from $50 to $43, admitting the previously anticipated rebalancing will take longer to achieve, and now expects “a global surplus of 400 kb/d in 4Q16 vs. a 300 kb/d draw previously.” Moments ago, the same Goldman analyst released a follow up note, confirming what we have been saying for the past year, namely that OPEC is increasingly irrelevant as a marginal supply-setter in a world in which it is the lack of demand that is a far bigger threat.

…read more HERE

…also:

The Case for Natural Resource Equities