The number to be watching and waiting on is 84.722 … a break there should cause the USD to again fall lower to the historical support level at roughly 80 … should then likely witness a brief recovery followed by a continuation of the decline to set new lows that are coming as a direct result of the trillions of USD’s recently created.

This will result in the pm sector along with the other commodity sectors rising.  The price of gold should continue up to resistance at roughly the 850 - 875 level … followed by a brief retracement … and the followed with a continuation in price higher going into 2009.

This will also be reflected in the mining stocks … first the majors followed by the juniors … look for the juniors to begin responding to the favorable environment starting early in 2009.

It is my opinion that we have already seen the lows of this major wave 2 move and we are already just beginning wave 3 … the wave all of us have been waiting on to take place.

Unfortunately for some, this last retracement has shaken their confidence and as a direct result will either not be participating in this next advance, or they will end of chasing the prices higher in the months to come.  Only those who understand the game will have the courage to trust what they see in the charts … inflation in 2009 will be returning to the headlines as governments throughout the world throw trillions of fiat into the system.

Who benefitted most from this retracement?  Those who are now holding physicals and the mining shares.  Unfortunately that would be the other team … as I keep repeating time and again, when you were selling who was buying … you are about to find out why they were the buyers and also why they constantly win while 95% of the general investing public lose.  Until one learns how to invest as a contrarian and understands how to read a chart, they will continuously find themselves on the wrong side of the trade.

NIA