imho either Gold falls or the Stocks play catchup.

My take is that Gold will correct to $750-$775 (as indicated in prior posts) and the Gold Stocks will start outperforming the metal staging the next (and final) blowoff leg up that will finally kick start the Juniors.

The USD is due for a Bear Market Rally.........all of this will help align sentiment for Gold stocks next leg.

The Juniors will lag until there is a perception that Gold is going parabolic and the focus will quickly shift from concerns over increasing mining and exploration costs to jubilation over limitless revenue.

In the short run, I was expecting a breakdown last week that didnt occur and hats off to Senor for picking up some Tequila money.

I'll try and post a few charts below on why I think Gold will now "Pop and Drop"

In a nutshell, Gold Indexes and stocks have made a higher low in an apparent triangle formation.
In most cases the higher low has been divergent with Breadth, RSI, MACD and Slow Stochastics, a new High in the Metal will coincide with a test of the upper boundry of the Triangle for Stocks which should be a good short.

Obviously, a spike up in Gold with an even higher spike up in stocks out of this triangle and my short term view will be wrong or delayed.......

definetely looks closer to the top than the bottom!
IMO

The $GOLD:$XAU ratio did surpass 5 this week and turned down a bit Friday.

RD,
Why not wait for the next run to 6 or higher, which may come with next 8 yr cycle low in gold (due in 2009)?

Kimston

OK. If you will guarantee it will happen.

It's interesting that the $GOLD:$XAU ratio topped in late 2000 but the gold rally did not begin for 3 months.

Here's an interesting Chart from Jack Chan:

AmericanBulls.com candlesticks gave a BUY confirmation on GLD Friday and a Buy-If on GDX:




On the other hand,
Pitbull went to cash in their GLD on 2/6/2008.

I'll guarantee that it might happen, and there is a very good chance that it will happen.

sure, it can happen but will level will gold get to! there is a good chance that 650 is not seen again for quite some time. and my guess is the upper 700s will be all we see. but this is pure speculation.
dharma

Funny thing is you have a market at all time highs that just went back and retested the old highs of $850 successfully. Yet I hear every cycle analyst looking for a top this week or next. The least predicted outcome from here is straight up.