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Mix-Ansicht- Donnerstag: yes - as usual ' the Aden's' - Emerald, 19.06.2003, 10:31
Donnerstag: yes - as usual ' the Aden's'
--> The Fed's decision on interest rates next week will have an impact on the dollar, gold, bonds and stocks.
This week's rise in gold and especially gold shares, made many wonder if the A rise is still ongoing, or if the B declineis over. Gold shares began their A rise before gold did and it's lasting longer than gold's rise lasted. Gold shares have been rising for 12 weeks now while gold's rise lasted 6 weeks. But based on cyclical timing and considering gold's decline today, it looks like gold shares had an extended A rise while the B decline is still ongoing in the gold price. HUI & XAU rose to the January highs this week as we suspected, but it looks like they could resist there. Most important, gold shares have been outperforming gold over the last four weeks at a critical moment. This is very bullish for the upcoming C rise. HUI and XAU are very strong above 145 and 76, respectively. If they close clearly above the January highs, it would be a break out.
There are times in the cycles when the movements aren't crystal clear like now and we must watch the numbers closely. If gold stays below $364 on a close, the four week B decline is still underway and it could decline to $345, and it could take another month or so to get there. Gold shares would then give way. If, however, the B decline ends prematurely, then the bull market is in full swing. Considering gold shares' strength, rather than waiting to buy new positions on weakness, we recommend buying gold shares gradually over the month.
The dollar index fell to another low this week, but it's still poised to rise short-term, especially if interest rates are left unchanged. If the dollar index (basis September) now closes above 94.20, it could rise to 97 and still be weak in the big picture. But if it closes at another new low below 92.80 (Sept), it'll be extremely weak. The euro and Swiss franc are poised for a downward correction if they stay below 117.50 and.7680, respectively. The euro could decline to possibly 1.13 and still be strong. The Australian, New Zealand and Canadian dollars are at new highs or near them. They'll remain very strong above.6600,.5740 and.7400, respectively. The British pound is strong above 1.65.
U.S. bonds fell this week from a short-term overbought area. Bonds rose too far, too fast and further weakness would be normal. If the 30 year yield now stays above 4.30%, it could rise to 4.60% while bond prices decline. For the first time since 1998, bonds are now in a major overbought area that normally coincides with major tops. This means the 3 year old bull market may be maturing. It's too soon to tell but since a decent decline could occur, short-term traders may want to sell.
The U.S. stock market continued to rise with most indices reaching yet another almost one year high yesterday. Nasdaq reached a one year high today. The 14 week rise is strong as long as the Dow Jones Industrials stays above 9000, and it could still reach 9500 before the rise is over. But the market is overbought, the most in over a year, which means the rise is nearing an end. The Transportations may be leading as they haven't reached a new high in two weeks. If Trans stays below that high at 2556 it'll be a sign of vulnerability. If you have DIA, QQQ or SOXX, keep a trailing 10% stop and sell if it closes below it, or if the Dow closes below 9000. As we said last week, now's the time to watch the market closely.
The world equity markets continue to rise with Wall Street. Many of the rises look good, but since the U.S. market's rise is maturing, they're vulnerable too.
Warm wishes and until next week, Pamela and Mary Anne Aden
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