Gold futures end lower -- dollar gains--IBD confirms markets in Rally Mode

"I would be wary of being bearish on the dollar,'' O'Neill told academics and students at the University of Oxford late yesterday. ``I personally think that a year from today the dollar will be quite a bit stronger.''

O'Neill also said he is optimistic that a narrowing of the U.S. trade deficit will help revive the dollar's allure in coming months. He also said that models used by the investment bank analyzing media reports suggest pessimism about the dollar among market participants is close to a peak.

"Investors should hold short positions for gold on expectations that concerns about credit-market losses tied to U.S. subprime-mortgages will subside,"

Gold may decline 15 to 20 percent next year, O'Neill said in an interview from London today.

``We think gold's gone a long, long way and we think it's due for a 15 to 20 percent move down,'' he said in an interview.



$gold high pole warning
xau bearish
Hui bullish

I still think gold is headed lower in the short term and gold stocks will finish a correction over the next several weeks.

The broad markets reversed yesterday after a confirmation up day (IBD follow thru day). I think this is a tradeable rally into the end of the year but the recent Dow Theory bear market signals makes me think the broad market will make new lows during the first 6 months of '08.

This weekend I plan to review the trading signals I use for gold stock trades.