@robenruben I agree 100%. I’ve been making a consistent case for a near-term rally in the dollar despite the high level of bearish sentiment & fact the dollar was in a strong downtrend when I started making the case for a bounce (some of my recent commentary on the dollar can be found here: http://rightsideofthechart.com/tag/uup/ ) At this time, I’m looking for a bounce up to at least the 24.65-24.75 level on UUP while I’ll continue to assess & modify my bounce target(s) as the charts develop in the coming days/weeks.

Randy,
Dollar plays a major roll in GOLD correction. Do you see $ going higher and to what levels?
Thank you

Yes, I do see the possibility for a much deeper correction the miners. In fact, my max. downside pullback target would be about the 17.70 level on GDX, representing a correction of about 31% off the recent highs. That level corresponds with both horizontal price support as well as a 61.8% retracement of the run off the Jan lows. FWIW, that horizontal support shows better on a long-term monthly chart(20+ year) of the $HUI gold bugs index (150.57ish level + 61.8% Fib retracement). Can’t say that I’m targeting that level, at least not just yet but very much open to the possibility, depending on how the charts develop going forward.

well said, I’ll take the trade. This may be getting ahead a bit too much but do you see the possibility for a even larger scale correction for gold? And miners? Maybe GDX to 19.1 level? Or do you think there are very low chances of this happening (due to long term bullish technicals)? Thanks

I was contemplating adding to my NUGT short & still might but will probably just sit tight with my current position as it’s usually better to have an under-weighted position than an normal or over-weighted position when playing a counter-trend trade on the miners.
As far as the wedge breakdown, here are my thoughts: GDX already managed a very slight break below the wedge last week but not enough to say it was anything more than a tag of the bottom of the wedge. However, based on where prices are now in relation to the apex of the wedge plus the fact we just tested it a few trading sessions ago & are already testing it again (GDX is actually slightly below the wedge or right on an alternative uptrend line I have off the Jan lows), my guess is that it will break down from here without another bounce back inside the pattern.
IMO, one could short GDX or NUGT right here with a stop above 24.75 GDX for an objective entry with an attractive R/R of about 0.85 downside for a possible gain potential of about 2.80 (3.3:1 R/R). Still a counter-trend/aggressive trade so certainly not for everyone.