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Gold clearly broke out to an almost seven year high, closing at the high today, while gold shares remain stronger than gold. The HUI and XAU gold share indexes closed at six year highs today. The bull market is strong because the C rise is once again proving to be the best rise in the intermediate cycle. And it'll remain underway as long as gold stays above $374. HUI and XAU are super strong above 196 and 92, respectively. The weak dollar is helping to push gold up, but keep in mind, the C rise could end at any time or it could last another month or so. Looking at the overall picture, the C rise is more likely to last on the longer side and gold could still reach the $400 level before it's over. It's important now to keep an eye on the numbers. Silver is holding firm near the highs and it's very strong above $5.12. Platinum is solid above $690 as is copper above $.7950. Even palladium looks better. Oil popped up today. If December oil can now stay above $26.80, it's stabilizing. Keep your gold, silver and their shares' position.

The U.S. stock market is looking uncomfortable at the highs as the weak dollar is putting a damper on the rise. The Dow Industrials reached a high last Thursday just as the Transportations reached its major resistance and the market has been down since. Today's fall may be the start of the end of the six month rise because the indicators are declining from an overbought area. If the Dow now stays below 9500 and closes below 9300, the rise will be over. This would be reinforced if the S&P 500 closes and stays below 1000. Nasdaq was hit hardest today. It's still strong, but if it closes below 1825 it could fall to 1750 as a first target. Watch your positions closely and be quick to sell if your 4% trailing stops are broken. Don't buy new positions.
U.S. bond prices rose to nine week highs today. The rebound rise continues and bonds have room to rise further. As long as the 30 year yield stays below 5.17%, it could decline to the 4.90% - 4.95% level before the rebound is over. The 10 year yield could decline to 4%. If you're still holding bonds or TLT keep them in order to sell at a better price. We'll likely be selling within a month.

The U.S. dollar fell this week when the G7 called for more flexibility in the exchange rates. The dollar index closed at a 13 week low today and the rise since June is clearly over. The dollar index is weak below 96 and it's on its way to 92 as a first target. A renewed rise in the currencies is underway as the yen jumped up, breaking its.8600 resistance and leading the way. The currencies are strong above 1.13 euro, 1.62 British pound,.7300 Swiss franc,.6600 Australian dollar,.5850 New Zealand dollar, and.7280 Canadian dollar. Keep your positions and ICPHX. FAX, FCO and GIM are rising and nearing their highs. They are getting an extra boost from bonds. If you have them keep them to sell on further strength.

The world equity markets are mixed. Germany is down while Hong Kong hit another high, for example. EUROX and INR closed at another high today while EWW, INW and TTF are at the highs. EWS and TDF look toppy. Like the U.S., the world markets are overbought. Keep your positions, but be quick to sell if your 4% trailing stops are broken. Don't buy new positions.

Warm wishes and until next week, Pamela and Mary Anne Aden