Ratio topped in Dec-10 (~0.29) and bottomed in Jul-12 (~0.11).
.23 retrace = ~0.15
.38 retrace = ~0.18
.50 retrace = ~0.20

DAX back above 7400 as shown on the 5hr futures chart. April 2012 high = 7600.
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Lately US investors have been seeking guidance from the DAX.
DAX up -> Europe all clear -> Buy stocks.
Let's see if this continues.

URZ broke out of a triangle last week as shown on the 60min chart. Carried a massive amount of short interest at end of Aug. If support holds, should be atleast one more wave up. Target 2.00 and possibly 2.20.
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Last week Japan announced that it was restarting its nuclear power stations. Long term plan to phase them out by 2030, however Germany said a similar thing 20 years ago and their nuclear power stations are still operating.

With the end of the Quarter coming up, I'm thinking that the probability of a serious decline here is low as many funds will be compelled to window dress (dips will be bought). Market may just levitate into October. Q3 earnings season kicks off mid Oct.
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This scenario favours Democrats/Obama as many middle class voters will receive their investment & retirement fund Q3 results in October to see some juicy returns. They will be inclined to think that the current administration must be doing something right.

Chart dates from last Thursday. Analysis not intended as a DUST trade recommendation.
DUST as indicator for GDM/GDX/HUI short term or intermediate term top.
Note the widening divergence between gold and GDX price at DUST support over the past 12 months.
A break of DUST support and a move of PoG through $1800 should signal that the correction in gold that commenced in Sep-2011 has ended and that a new upleg in gold is in progress.
FOMC meeting - USFed may decide to devalue the dollar through another round of QE.
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Notes:
1. Lows and highs are labeled with Gold/GDX price.
2. DUST nearing intermediate support - potential for bounce off support.
3. Zig-zag wave formation unfolding? wave-b (alt: wave-2) approx .618 retrace of wave-a.
4. RSI nearing oversold
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The Daily Gold Miners Bear 3x shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index ($GDM).

I think the severe divergence that has developed between gold mining stocks and bullion during the past 12 months has a lot to do with the downward repricing of gold stocks by funds and institutional investors. A lot of the big cap gold miners have been plagued by production problems and few have managed to meet their production estimates which have tended to be too optimistic. Overall, performance and earnings have not met expectations.
Goldcorp Misses Estimates in 2Q

Production problems have impacted large Sth African, Canadian and Australian producers as well as American. In addition to production problems associated with bad weather, declining grades and cost blowouts, the increase in PoG to $1500+ has not gone unnoticed. Mining workers are demanding a bigger cut through increased pay. Sovereign Govts and indigenous land owners are clamouring for a bigger slice of the pie as well. All of them have the power to impede production at a moment’s notice if their demands are not met. With PoG rising to $1500+, theft by pilfering employees is becoming a problem. Many of the mines are in remote locations of the world, far away from law enforcement. Often supervision and accounting practices within the mine site are lax. With greater general awareness of the increasing value of gold & silver, these problems may worsen in the coming years.
These problems and the eratic performace of gold mining companies have led to some investors favouring gold ETFs such as GLD as a better play on the rising price of gold compared to mining stocks. Alternately look to invest in gold mining companies which are efficient and reliable producers and avoid the slackards which are poorly managed and are plagued by production shortfalls/stoppages.
Australia's gold production declines by 5%

Europe's premier stock index appears to have cleared significant resistance today.

BAC testing major resistance at $8.32 dating back 12 months as shown in chart dated 22-Aug. Broke through resistance on heavy volume in March only to get dumped after escalation of European banking crisis. Looked like it was about to suffer a major breakdown with the rest of the banking sector in July but recovered.
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BAC currently well below March 2012 high. A break through the trendline may signal that US banking stocks are ready play catch up with the broader S&P500.
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US banks have reduced their holdings of European Govt bonds but are still exposed due to outstanding loans to the European banking and finance sectors.

Short squeeze. AUMN had a build up of 22 days (avg vol) short interest (12% or shares) at 31-Jul. MUX had about the same. Junior gold stocks carrying more short interest so expect more upside.
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See previous post for AUMN short term targets.

AUMN broke out of an ascending triangle as shown on the 60min chart and is now 6.5% up for the week. Last triangle to break to the upside in early July had a good run.
Downtrend resistance on the weekly log chart currently at ~5.45. If broken next resistance at ~6.25

DAX near resistance as shown on chart. Expecting a minor pullback at a minimum. If this resistance is broken, could see a run towards the May 2011 high ~7600 and possibly the Jul 2007 high ~8100. Need easing of European banking/debt crisis and additional stimulus talk by CBs to support bullish outlook. Lately CBs have discovered that they can juice the equity markets by talking up billions of fresh stimulus & bailouts.
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Jackson Hole CB conference coming up. No surprises expected, however Draghi and Bernanke may release a joint paper titled "How to Print Your Way to Prosperity" and send it gift wrapped to Angela Merkel.

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IMO markets will continue to be influenced by economic data and CB machinations. Emboldened by +ve July employment data, bulls are talking up an Obamarama rally towards the S&P500 Oct 2007 high of 1565.
Stock market rebound means Obama will be re-elected, says funds giant

July employment reported +163K. Bears noted that the figures had been massaged as the July births/deaths adjustment for the prior 3 years had been +6K, but this time round +54K. July employment growth more likely to have been ~100K.
Friday's release of the July budget figures showed that tax receipts were up confirming growth in the economy.
US budget deficit totals $974B through July
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During the last few weeks the broken Travel and Leisure & Restaurant sectors have been treading water (see chart) while the SPX500 has been rallying towards its April 2 post GFC high of 1422. If Funds move back into these recession sensitive sectors it may indicate renewed optimism concerning future growth of the US economy.
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US banking sector also lagging SPX500, possibly due to exposure to ongoing European banking crisis.
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In 1929 the US credit cycle topped out at 290% of GDP (private & public debt). In 2007, debt reached 350% assisted by a massive expansion of debt issuance to sub-prime borrowers. The cycle may not end until total debt is well over 400% with the USFed and USGovt doing most of the heavy lifting. Some analysts believe with ZIRP, debt expansion can continue for some time, citing Japan as an example. Note that at present Japanese Govt debt alone has expanded to 240% of GDP.