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Mix-Ansicht- Punkt um 06.00h - Emerald, 29.05.2003, 06:00
- Re: Danke - und Grüße in die Schweiz! (owT) - chiquito, 29.05.2003, 06:47
Punkt um 06.00h
--> Don't be surprised if we see some short-term corrections in the currencies, bonds and perhaps gold. They all remain very strong, but the run up is overdone.
Gold's seven week rise, we call an A rise, is very strong above $355. Gold has already performed within the norm of an A rise which means if it closes below $355 the A rise will be over. Seven weeks is the shortest duration of an A rise and while mid-June is the more likely time for the end, it wouldn't be bad if it happens sooner because the performance was good. Considering A rises don't usually rise to new bull market highs, last week's high at $372.20 (basis June) may be the peak. Keep an eye on $372.20 and $355 as a close either way will tell us the A rise's fate. Gold shares are struggling with their rise even though they have room to rise further. HUI and XAU will remain strong above 134 and 70.50, respectively. But if they fail to rise above last week's highs at 143.37 and 75.58 respectively, the rise will be running out of steam. Keep in mind if the A rise is about over, the bull market is solid. If gold rises to a new high, then it's very strong. Either way is fine in the big picture. Gold shares are diverse. NEM and TGLDX have been the better performers. Start selling some of the weaker ones we outlined in our May issue, and buy the stronger ones on upcoming weakness (B decline). We also like Randgold (RANGY), IAMGold (IAG) and Scudder Gold & Precious Metals fund (SGDBX). Platinum is strong above $650. Silver is firm above $4.60.
The stock market's eleven week rise remains underway as most stock indices rose to new rebound highs. Nasdaq, one of the strongest, closed at an almost one year high today while S&P500 closed near its August peak. The Dow Utilities is also very strong. Although the Dow Industrials rose to its January highs today, it's still lagging the others as it has yet to close above the January high at 8842. Keep an eye on this high as well as the November high at 8931 because the Dow is unimpressive if these levels aren't surpassed. The Dow's rise is strong, however, as long as it stays above 8600. The Dow Transportations will remain vulnerable below its 5 week moving average at 2425. The market's rise to date has been the best since the rise following 9-11, and it could go further, but it must still prove itself on a major trend basis. If you have DIA, QQQ or SOXX, sell if the Dow closes below 8600.
The strong bond market is starting to take a breather at a short-term overbought area, and following its almost non-stop rise. But as long as the yields stay below 4.55% on the 30 year and 3.55% on the 10 year, bonds will remain very strong. Even if the 30 year yield rises to 4.70%, the market will remain strong. Keep your position as well as TLT.
The dollar index fell to yet another low yesterday as it nears the 1998 low at 92. It may temporarily hold above that level and take a breather because the Dollar is oversold on a short-term basis. The Dollar index will remain very weak below 95.50, but even if it rises to the 98 level, it'll still be weak. The dollar has room to fall further on a medium and long term basis, and if 92 is clearly broken it'll be entering a more bearish phase. The strong currencies are due for a rest and the Canadian dollar may be leading in a normal downward correction. The currencies will remain very strong above 1.15 euro,.7600 Swiss franc,.6410 Australian dollar,.5715 New Zealand dollar and.7170 Canadian dollar. Even if they decline below these levels to say 1.12 on the euro, they will still be strong and it would then be a good buying area. Keep your positions as well as the ICPHX, FCO, GIM and FAX funds. Short-term traders may want to take some profits (not all).
The world equity markets are rising with Wall Street. Mexico is at an almost one year high. Stay out for now.
Warm wishes and until next week, Pamela and Mary Anne Aden
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