A critical week ahead

One year since their rallies began, gold is back at important long-term support, and silver is also there or close to it. GDX, the gold-mining ETF, is the weakest of the lot, having broken its 200-week MA. If a reversal doesn't materialize within a matter of days, look out below! The U.S. dollar index has peeked out above an important downtrend line. Either the buck stops here, pronto, or it could rise much higher.

GOLD (daily)

December gold closed on Friday just below the bottom rail of the channel and close to the Fibonacci 61.8% retracement level, after having been repelled precisely at the Fib 50% level on Thursday. In a sign of weakness, RSI failed to break out of the oversold zone.

GOLD (weekly)

Gold touched the uptrend line dating back to July 2005. RSI is the lowest it has been during the entire move since 2002. MACD is approaching zero, close to where it bounced in 2003, 2004, 2005 and 2006. If the uptrend line is decisively broken, gold could conceivably fall another $100 and even completely retrace the move from exactly a year ago. But given the steepness of its decline in the past several weeks, a bounce is likely here.

SILVER (weekly)

Silver touched the uptrend line from June 2006, where the similarly dramatic correction of the 2005-2006 bull move ended. Both RSI and MACD are at their lowest levels of the bull market since 2002. If silver doesn't bounce convincingly here, it could tag the 200-week MA, just 60 cents below, or even completely retrace the move from exactly a year ago. But its almost vertical descent in the past two weeks suggests that a bounce is likely here.

GDX (daily)

The gold-mining ETF was repelled by the bottom rail of the blue channel and fell back on Thursday and Friday in an apparent attempt to test Monday's low, which was made on exceptionally high volume. RSI has returned to the oversold zone. A successful retest could propel GDX back into the channel.

GDX (weekly)

This is one ugly chart. GDX has broken below its 200-week MA, on record volume, for the first time since the autumn of 2001. RSI is the lowest it has been since the autumn of 2000, the very beginning of its bull market. If it doesn't bounce soon, GDX could completely retrace its move from exactly a year ago. It could conceivably test the green uptrend line from November 2000. Until then the bull market is, in theory, hanging on -- by the skin of its teeth.

U.S. DOLLAR INDEX (daily)

The index has risen from strength to strength and is within spitting distance of its 2008 high, made in January. RSI, at nearly 84, indicates that the dollar is severely overbought. The index is now as high above the downtrend line as it was below it when the dizzying rally was launched exactly a month ago. A reversal is likely imminent.

U.S. DOLLAR INDEX (weekly)

The index has penetrated an important downtrend line, which has been touched no fewer than six times since November 2005. Unless it reverses practically immediately, there is a chance the U.S. dollar could really rally from here, perhaps as far as its 200-week MA.

GDX:$SPX (weekly)

The ratio of the gold-mining ETF to the S&P 500 index has plunged profoundly in the past month or so. In the past week it broke below its 200-week MA on nearly record relative volume and now rests on the downtrend line from May 2006. RSI is still above oversold levels, so it is possible that the ratio will test its uptrend line from November 2000. A failure there would indicate the bull market was over.