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With several charts at or near areas of pattern resistance, and December OPEX next Friday, continued choppy behavior with a bearish bias continues to be the short term expectation.

Turned out to be a pretty good summation of this past weeks action.

Of particular note this week, the precious metals arena got clobbered with both the Precious Metals and XAU advance/decline lines breaking below important support levels probably more as a reaction to gold's 8% decline as opposed to any anticipation to this same weakness. Because of the synchronicity between price and breadth during this same unwinding process, and the bullish momentum divergence building with spot silver, this is one of those times in which standing aside and letting things settle is a better option than attempting to decide what may be the next course of action. If for anything else, however, a snapback to or towards those areas which were violated this past week wouldn't at all be surprising on a purely technical basis.

The NYSE Bond CEF advance/decline line continued to move into new all time high territory, and the expectation of stable to lower interest rates with these same breadth highs should be maintained as long as this trend remains intact. Because of lower lows this past week in 10 year rates, the REIT advance/decline line had a firm finish, and now lays just below its declining tops line. We'll see next week if this was a defensive strategy looking for better yield or if this same firmness was in anticipation of what may be part of a major low in prices on a general basis.

On the other side of the fence, the Australian All Ordinaries advance/decline line moved again to new all time lows this past week suggesting that a downside price break from the current bearish pennant formation as being the best expectation going forward.

In summary: with December OPEX out of the way, and many price patterns highly compressed right now, next week holds the promise of a pick up in trading action. Given the recent and ongoing breakdowns in both the breadth and volume McClellan Summation Index', the expectation is for some downside action to minimally challenge the Black Friday price lows. Whether we start building internal divergence or not is still up for discussion, but we should hopefully have a better handle on this question with next weeks update.

May your holiday season be filled with joy and glad tidings!

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