[clarifications in italics]
In summary (3-6 month outlook): Dollar Up, Gold Down, Nasdaq Down and the S&P meanders about. I'm seeing gold between the 980-1000 eventually but there will be interim support at 1035. In the short-term I would anticipate a run to the 1135 resistance as the dollar eases back some. The Gold/Oil ratio should come in the 12.50x range (linked) but this, in and of itself, does not imply a floor in gold prices, just they should move in tandem for a brief period (down). SPX/Gold suggests the index will outperform the metal by 10% as well as outperforming the Nazdaq during the same period. The latter scenario (SPX::COMPQ) needs to be monitored because when the Nasdaq rolls over there is follow-through in the broader market. [The Short Nasdaq trade is what I'm most interested in.] Just note the Nasdaq is more sensitive to currency moves than the Dow and S&P.
In the short term it's likely we'll see a retreat across the broader markets (5-10% seems imminent now). There is resistance on the S&P at 1136/1140. The IYR:XLF correlation (linked) leads me to believe the IYR will re-establish the mean correlation (down). [But I am not messing with either of the two, because you are playing with fire. I am watching the Nasdaq for the short and already long USD. The IYR will pullback, but do not assume this is CRE crashing...Be nimble]
Lastly, a geopolitical event (such as Iran) does not mean people will flock to gold. In fact, I could see people buy Oil (in this case) and also go to the dollar as a safe haven.
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[Note: The graph for the S&P shows a probable bounce off the 1060 area. It is not out of the question 1000 comes into play again, or perhaps 950. But for the time being I would suggest looking no further down than the nearest major support area]
