In the closing days of April there was speculation on my part that $XYJ could bounce a bit at the bottom trend line to form a SHS reversal pattern – as indicated by the light blue parabola. Instead $XYY fell out the bottom of the rising channel, and then the BT gapped back inside. Mr. Market, it seems, is a devious creature with more twists and turns than a snake in the grass. What if – and this is a big “what if” – but what if yesterday’s big gap back inside pattern is what Plunger calls a head test? Could that be what the relative weakness in the miners is implying? The yellow metal has been showing strength for sure, but it seems to be a one horse cavalry, and it may not be a good idea to bet the farm (yet) on a continued rise. Its possible $YEN is forming an even larger SHS reversal pattern as denoted in red. We shall see.

Note: Most are aware that $YEN and gold have been moving in tandem these last few years. Not sure why, but they will continue to do so until they don’t.