As noted a few weeks ago, we were entering a highly seasonably favorable period of the year for the stock market; A.K.A the Santa Claus Rally. The mortally wounded bulls are hailing this as yet another bottoming process. I can’t remember if this is the ninth or tenth one (there’s been so many all the way down from 14,000 on the Dow). While the DJIA rally has been contained under 9,000, one could start to argue a reverse head & shoulders is forming (a bullish pattern). If not for the horrific economic picture, I could buy into this development. I continue to hold onto my feathers as I sit this out in my chicken coop.

Gold has rallied nicely off dollar weakness and continuing strong physical buying. The “Talking Heads” on TOUT-TV can knock gold all they want (and they do) but it has held its value through 2008. I bet these salespeople/anchor personnel wish their 401k did as good. Let’s see how well gold does when the dollar consolidates its losses.

U.S. Dollar - The top I called for appears to have been put in. We can see some consolidation this week but make no mistake about it, Uncle Sam’s paper is only going to get cheaper in 2009

Oil - Things are getting quite interesting. We fell from $140 to $50, which was an area of support. It hardly bounced off $50 before breaking down and heading straight to $40.50. I said that was a multi-year major support zone. Oil was deeply oversold and the rally back to previous support at $50 was a typical technical pattern. The failure to hold $50 and fall back to $45 strongly suggests that unless OPRC does something beyond dramatic, not only is $40 likely to be tested again, but it may break that support as well. Stay tuned.

Interesting article on mining shares