IMO, we are at the beginning of another short term contraction in the pm shares. Setting up this projected move was gold hitting 1000 for the second time around with no follow-through. Adding to the unfavorable mix for the pm shares was the all-important 1000 day moving average line on both the HUI(320) and XAU(138) that stood in defiance of prices moving past it, plus the 200 day average lines on both that held both indexes in check right on the money(XAU/135 and HUI/320 plus). The 320 area on the HUI on both the 200 and 1000 day averages basically sapped the energy from the index.

The CDNX is looking to be putting in a right shoulder of an important head and shoulders bottom formation with an overhead neckline at about 900.

It's a little early for scoping out a reaction low in either of the mentioned indexes but the XAU can be generally looked at for some guidance. Currently, the XAU is lower by 7.08% at 119.24 which is down 9.09 in the day's trading. On the downside, it appears somewhere above the 100 level that the XAU Index will put in a short term bottom and prepare for a major thrust in the near future passing the 200 and 1000 day averages concomitant with gold blasting through the 1000 area on its third attempt.

PATIENCE