The following update reflects our near term outlook. For our longer term outlook, please see 2014 Outlook (12/27/13).
2014 Outlook (12/27/13).
However, our previous analysis on gap dynamics (see This Gap is Different (8/23/13)) suggests that this first gap of 2014 is likely to be filled. If so, odds favor a higher high. In that case, the advance since the June 2013 low ends up as an ending diagonal triangle (Chart 1-green), with a final overthrow still to come.
Chart 3 presents our main bullish (blue) and bearish (red) tracking counts on the USD index. At the moment, both counts suggest near term strength in the dollar. The 83 area appears to be a reasonable target.
Gold is bottoming (Chart 4). The next move is likely an advance towards 1400 to 1550.