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Gold, silver, platinum, palladium, copper and their shares were hammered today as China suggested taking steps to cool down its economy. The shares were hit the hardest with the double whammy of declining gold and stocks. It increasingly looks like gold's in an extended D decline but more important, all the precious metals' major trends remain up by staying above $376 for gold, $5.50 for silver, $745 for platinum, $215 for palladium and $.95 for copper. Gold shares are now at a critical level because they're near a maximum extreme low area in the bull market. Both the XAU and HUI closed below their 65 week moving averages today and they are very weak below these levels at 185 (HUI) and 87.50 (XAU). But gold shares are also now finally oversold and in most cases extremely so, which means they could begin looking for a bottom near the current lows. XAU has final bull market support at 79; if it holds above 79 and bounces up to near 87.50, a bottom will most likely be forming which would then be a good entry point. Gold shares won't be out of the woods until they rise and stay above 90 on XAU and 199 on HUI. Meanwhile, gold is weak below $400 as is silver below $6.50, platinum below $850, palladium below $265 and copper below $1.27. Oil remains stubbornly strong above $35.50. Continue to keep your positions.

The U.S. dollar index is strong but it resisted at the key 91.50 resistance level this week. The leading indicators are now starting to decline from overbought levels, so the dollar could stall out near current levels. If the dollar index closes and stays below 89.50, the rebound rise will be over. But if it rises and stays above 91.50, it could go to 93.50 in a stronger rebound but the dollar's major trend would still be down. The currencies remain weak but some appear to be bottoming. Most are bullish, a couple are testing their major uptrends, but the Canadian dollar is bearish. The leading indicators are currently starting to rise from oversold levels, meaning the downside is limited and they're near the lows. The euro, for instance, should hold near the 1.1890 area; if not, it could decline to 1.16 in a worst case. We advise holding. We may sell the Canadian dollar on a rebound rise if it stays bearish, but not now since it's extremely oversold.

Despite the stock market's short-term ups and downs, the market has been slowly deteriorating since February and it still looks like a major top is forming. The leading indicators are reinforcing this as they continue to decline, signaling the stock market could head lower at any time. Most of the stock indices are also below their 15-week moving averages and if they stay below the following levels, they'll be vulnerable to further weakness: 10475 on the Dow Industrials, 2040 Nasdaq and 1135 S&P500. Should Nasdaq close and stay below 1940, it would signal a major trend reversal and it would be the first strong confirmation that a renewed bear market is underway.

The international stock markets are similar and all stocks should be avoided for now.

Long-term interest rates moved higher this week and bonds remain bearish. Bond prices are not yet oversold, which means they'll likely decline further in the upcoming months. That'll be reinforced as long as the 30 year yield stays above 5.05%. The major trend for bond prices will remain down with the 10 and 30 year yields above 4% and 4.91%, respectively, so stay out. We continue to recommend buying Rydex Juno (RYJUX) and Pro Funds Rising Rates Opportunity (RRPIX) funds, which should do well as rates head higher.

Thank you, warm wishes and until next week,
Pamela and Mary Anne Aden


Gold, silver, platinum, palladium, copper and their shares were hammered today as China suggested taking steps to cool down its economy. The shares were hit the hardest with the double whammy of declining gold and stocks. It increasingly looks like gold's in an extended D decline but more important, all the precious metals' major trends remain up by staying above $376 for gold, $5.50 for silver, $745 for platinum, $215 for palladium and $.95 for copper. Gold shares are now at a critical level because they're near a maximum extreme low area in the bull market. Both the XAU and HUI closed below their 65 week moving averages today and they are very weak below these levels at 185 (HUI) and 87.50 (XAU). But gold shares are also now finally oversold and in most cases extremely so, which means they could begin looking for a bottom near the current lows. XAU has final bull market support at 79; if it holds above 79 and bounces up to near 87.50, a bottom will most likely be forming which would then be a good entry point. Gold shares won't be out of the woods until they rise and stay above 90 on XAU and 199 on HUI. Meanwhile, gold is weak below $400 as is silver below $6.50, platinum below $850, palladium below $265 and copper below $1.27. Oil remains stubbornly strong above $35.50. Continue to keep your positions.

The U.S. dollar index is strong but it resisted at the key 91.50 resistance level this week. The leading indicators are now starting to decline from overbought levels, so the dollar could stall out near current levels. If the dollar index closes and stays below 89.50, the rebound rise will be over. But if it rises and stays above 91.50, it could go to 93.50 in a stronger rebound but the dollar's major trend would still be down. The currencies remain weak but some appear to be bottoming. Most are bullish, a couple are testing their major uptrends, but the Canadian dollar is bearish. The leading indicators are currently starting to rise from oversold levels, meaning the downside is limited and they're near the lows. The euro, for instance, should hold near the 1.1890 area; if not, it could decline to 1.16 in a worst case. We advise holding. We may sell the Canadian dollar on a rebound rise if it stays bearish, but not now since it's extremely oversold.

Despite the stock market's short-term ups and downs, the market has been slowly deteriorating since February and it still looks like a major top is forming. The leading indicators are reinforcing this as they continue to decline, signaling the stock market could head lower at any time. Most of the stock indices are also below their 15-week moving averages and if they stay below the following levels, they'll be vulnerable to further weakness: 10475 on the Dow Industrials, 2040 Nasdaq and 1135 S&P500. Should Nasdaq close and stay below 1940, it would signal a major trend reversal and it would be the first strong confirmation that a renewed bear market is underway.

The international stock markets are similar and all stocks should be avoided for now.

Long-term interest rates moved higher this week and bonds remain bearish. Bond prices are not yet oversold, which means they'll likely decline further in the upcoming months. That'll be reinforced as long as the 30 year yield stays above 5.05%. The major trend for bond prices will remain down with the 10 and 30 year yields above 4% and 4.91%, respectively, so stay out. We continue to recommend buying Rydex Juno (RYJUX) and Pro Funds Rising Rates Opportunity (RRPIX) funds, which should do well as rates head higher.

Thank you, warm wishes and until next week,
Pamela and Mary Anne Aden

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