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Crude oil soared, closing at a record high yesterday, as uncertainty reigns. Terror warnings, the Yukos crisis, China's demand and possible supply disruptions were the main reasons why. And even though oil fell today due to Yukos getting access to funds, oil remains very strong above $40 and it still has room to rise further. Energy stocks have been doing very well, but as we've been saying, we'd wait to buy on weakness since they're overbought and some are already starting to head down. NFX, XLE, CUX, UPL and IYE have been some of the strongest and we recommend buying these on weakness, but not now. We'll keep you posted.

Silver closed at a 3½ month high today. It's clearly stronger than gold and it's strong above $6.30. Silver is poised to rise further as it's rising from a clear oversold area and platinum is following. Platinum is firm and poised to rise in a renewed rise by staying above $810. Let's now see if gold, gold shares and palladium follow.

Gold held above its 65-week moving average last week and it's been bouncing up since then. Gold is solid above this moving average now at $386, but it's still not clear if the A rise is over. Since gold is holding and silver is strong, we're giving it more time to prove itself. Gold's stable above $390, but it must close above $398 in order for the A rise to remain underway. Keep an eye on $386, $390 and $398 this week.

Gold shares continue to bottom while the indicator is starting to bounce up from an intermediate oversold area. XAU has been stronger than HUI and both have been neutral in relative strength compared to gold. This means they are either at their maximum weakness compared to gold or the trend is ready to change to favor gold. Keep an eye on last week's low as both XAU and HUI will be stable within the bottom above these lows at 82.64 and 175.07, respectively. Both have final support at 78 and 170, respectively. On the upside, they'll begin to look strong within the bottom above 88 for XAU and 190 for HUI. The final break out rise would occur above 92 and 201, respectively. Watch these levels. Copper, like silver and platinum, is poised to rise in a renewed rise by staying above $1.23. CRB has been slowly trending down since March but it has support at 265 and final support at 257. Palladium is stable above $213.

The U.S. dollar index stopped rising this week, but as long as it stays above 89.50 it could still rise further. A close above 90 means it could rise to 91, but even if it does, it won't change the major downtrend. A close below 89.50, and especially below 89, would mean the 2½ week rise is over and if it is, the rise has been insignificant. The currencies are holding while the New Zealand and Canadian dollars are slowing the best strength and both are strong above.6290 and.7500, respectively. The other currencies are firm and basing by staying above 1.81 for the British pound, 1.20 euro,.7800 Swiss franc,.6970 Aussie and.8950 yen. Keep your positions for now.

The stock market remains weak, in spite of this week's rise. Nasdaq, the weakest stock index, hasn't even been able to rise above its 5 week moving average and it's very weak below it at 1910. The Dow Jones Industrials is also having a hard time staying above its 5 week moving average. Plus, the Dow, Nasdaq and S&P500 remain below their 40 week moving averages, which is a bad sign. Clearly, the market is slowly deteriorating and it has been for the better part of this year. The Dow is weak below its 40 week moving average at 10230, but even if it rises to 10400, it will still be in a six month downtrend. Keep an eye on the July 26 low at 9962 and the May 17 low at 9907; if these are broken, the leg down that started in June will be intensifying. Meanwhile, the Transportations, Utilities and Amex are holding firm unless they close below 3100, 280 and 1225, respectively. If so, their topping action will be confirmed. Stay out of the market.

The bond market's rise since May is still underway as long as the yields stay below 5.32% on the 30 year and 4.60% on the 10 year. If the 10 year yield closes below 4.36% it could still decline to possibly 4.20% while bond prices rise. But even if it does, it won't change the major trend, which is up for yields and down for bond prices. T-Bills (90 day) rose to another 21 month high yesterday. The trend is sharply up above 1.20%. Keep in mind, once short rates rise and stay above 1½%, there's a good chance it will hurt the stock market.

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