Mother of All Gold Short Squeezes?

Click on the title to read more about a potential short squeeze in gold on the horizon. Nov 28, 2008 is the date in which that short squeeze may begin. That date should be the 5 week low in mining shares.

My cycle work suggests a top in the gold mining shares around Dec 21. I am looking for a ST top this week and a fall next week, but that pull back should set us up for a nice rally into about the third week of December. The waves are now confirming this.

Nov 19, 2008 Market Forecast

Yesterday on my end of day post I warned that we could still go lower today. The futures are pointing down near the open. B waves can take out the previous low and that is 820 SPX. The 4 day cycle can run as much as 5 days. Today is day 16 since Oct 28. The 27 day cycle can run 30, so a low this week looks like it is in the cards.

The e-wave look has us in a final a-b-c wave off the late Friday top, with 'b' finishing late yesterday, and 'c' due today. Maximum downside is 795 SPX and then a strong rally should ensue (I'm not saying we go that low but...).

I'm still looking for a move back to the 50 day moving average before we again turn lower into December.

GDX looks higher on the open as it follows the stock market strength of late yesterday (on a negative A/D...not good) and then should turn lower again to the 18.30's today. I'm still looking for the 25 area soon for GDX.

All in all I don't think we are through going down yet, but a big turn is on the horizon.