The XAU is on the verge of giving an intermediate-term buy signal. It currently has resistance at the 125 level. This is the high of the past week, the mark of its downtrend resistance line connecting the September and October highs, and is also the point of the 20-day moving average. That's important because if you go back over the past 15 years every time the XAU had a correction, bottomed, and then closed above its 20-day moving average it rallied for at least a month. What is more if the gold stocks rally and outperform the metal today then the XAU/gld and HUI/gld downtrend resistance lines will be broken too. All the XAU needs to do is close above 125.79 to break all of these technical levels.

It looks like we're going higher folks. As you know I've been accumulating a position in gold stocks over the past few days. It's not too late to open or add on to your gold position. If the XAU is above 126 in the afternoon you should do so. To find out what I own just click here: WSW Power Portfolio

Oil and oil stocks also appear to be poised to go higher. The weekly stochastics on the price of oil has been apt at timing key buy points after corrections. The weekly stochastics have been oversold 14 times since 1996. In 12 out of those 14 times a month later the price of oil was higher. The two times it wasn't was in 1997 and 1998 when oil was in a bear market. We're hardly in a bear market now for oil.

Just like gold stocks oil and energy stocks have been in a correction since September that now appears to be over.

And even if you didn't pay attention to the charts, there are fundamental reasons to believe that oil is going to go up from here. OPEC is meeting next week to discuss production cuts in order to maintain current oil prices. And don't forget winter is coming.