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Gold shot up today to close at its closing high posted in January. The"A" rise is now at its moment of truth. If gold closes and stays above $430, which would be a clean breakout, the"A" rise would be strong and the bull market would be in full swing. Remember,"A" rises don't usually break up to new highs, but if they do the bull market is very strong. Considering that gold is also rising versus the euro (as it nears its 2002 high), while silver closed at another new high since 1987 today, and the"A" rise has time on its hands to rise further, it looks like gold will break up to new highs. This would be very bullish because gold would also then be entering a stronger phase in the bull market. Meanwhile, gold's"A" rise is underway above $410. Silver is incredible as it approaches $8 in an almost non-stop six week rise. Silver is clearly stronger than gold and it's taken on a new form. It's super strong above $7.20. Silver shares, however, continue to lag, but they've held near the highs and they're poised for another advance. Platinum, palladium and copper are holding near the highs and are strong above $865, $250 and $1.23, respectively. Oil fell, but its six month intermediate rise is solid above $35.
Gold shares are following gold's lead. Some gold shares like WHT are hitting new highs while a renewed rise is getting underway in many. XAU and HUI closed at a six week high today. Both are rising from near an oversold area and they're solid above 102 and 230, respectively. A close above 105.23 and 242.03 will confirm the renewed rise. Buy and keep your positions. The strongest are: WHT, GLG, ABX, NEM, BVN, PDG, GSS, BGO and CBJ. PAL is holding at the highs and we also like CEF.
The U.S. dollar is finally giving way to a stronger gold price. If the dollar index (basis June) now stays below 89.60, and closes below 87.50, the rebound rise will be over. If the rise since February is all the dollar can do, then it's very weak in the big picture. The next leg in the bear market will begin below 85. The yen reached a new bull market high today and it's been leading the other currencies. The Aussie and Kiwi dollars and the British pound jumped up today. If they can now stay above.7600,.6622 and 1.8250, respectively, the downward correction is over. The euro is stabilizing by staying above 1.2250 but the correction isn't over until it closes above 1.2450. The Canadian dollar is now strong above.7550. Keep your positions and buy new ones now. We also continue to like ICPHX, PSAFX and FAX.
The bond market gave back some of its strong rise and if the 30 year yield now stays above 4.75%, the rise may be over. But as long as the yields stay below 4.90% on the 30 year and 3.99% on the 10 year, the bond market will remain strong short-term. Plus, it's not overbought yet which means we could still see more strength. The big picture continues to show a major top formation.
The stock market bounced up this week and even though it had strong daily moves, the rise has not changed our bearish stance. The Dow, Nasdaq and Transports are still below their 15-week moving averages at 10460, 2030 and 2930, respectively. Remember, the 15-week moving average has been the key in identifying the one year rise and the market will remain vulnerable to a further decline below these levels. The S&P 500 is close at 1126. The strongest sector has been Utilities as it's been holding at the highs, but the indicators are breaking down and the Utilities will follow the others if it closes below 272. Stay out of the market.
The Japanese and Mexican equity markets remain strong. But with the tide turning, we still recommend staying out.
Pamela and Mary Anne Aden
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