Gold miners had a ferocious rally on Friday. As usual, there are crosscurrents in these choppy seas as nobody seems able to get a handle on the major macro theme (tame long rates despite Fed tightening, dollar and attendant deflationary "whiff" still strong, mixed economic reports, the largest of corporations like GM, F, AIG and FNM continue to show their unwinding seams as key elements of Frankenmarket), but the miners did indeed rally hard in the face of dollar strength.

Short term, anything can happen, but the dollar bull herd, oh so rare an animal in December, is bull horning more loudly of late. Here at biiwii, we gave the dollar its due around the 80 level when everybody knew it was toast. Now more and more people are buying the dollar rally story (got to love those hedge funds that people actually pay big money to get in on, as many of them provide a nice counter party for people who think in a contrary manner). The end of the dollar rally may not come for a while however. Face it, we are steeped in apparent short term fundamentals and technicals that support the dollar rising further. But they don't send you a notarized letter at tops or bottoms. So I have been buying and trading the miners in anticipation of a dollar top or at least a gold bottom.

HUI is interesting to say the least. Is this simply a sort of A-B-C upward correction, doomed to failure and a test of the lows? Could be. It could also be the making of a major bottom.

Nothing has intrinsically changed with the dollar. It continues to denominate a debt culture of major proportions. Gold is attempting to break out in other currencies and for a day (if not much longer) gold and the dollar made content bedfellows as they can both be perceived as a destination in a flight to quality. And one of them actually IS quality.