Aden

verfasst von Emerald, 06.01.2005, 07:53

-->Week of January 5, 2005

Happy New Year! The new year is so far starting off with corrections in the metals, currencies and stocks.

Gold's D decline is now in its 5th week and it's still poised to decline further. That is, the D decline could last another month or two (see Webextra). Today gold closed at a nine week low. It'll remain under pressure below $445 and it's weak below $435. If it stays below $435, gold could decline to possibly test its 65 week moving average now at $408. Silver is falling with gold as it closed at a 14 week low yesterday. It's weak below $7 and it would be very weak if it closes and stays below $6.40. Gold shares are also falling with gold. Some gold shares are oversold but as a whole they have room to stay under pressure. The ones that have held up the best so far are: BHP, RTP, WHT and ABX, but we recommend waiting before buying new positions. Both the XAU and HUI are weak below 99 and 215, respectively, and the latter could decline to its 189 support. Platinum has been moving in a wide sideways band for five months now, which means it's neutral by staying between $820 and $880. Copper is volatile. After reaching a new high it fell sharply, but the major trend is up even if it declines to $1.25. Crude oil has been bouncing, backing and filling, since reaching a low on December 10. It'll continue to base if it stays above the low at $40.80 (basis February). A close above $46.60 would mean a renewed rise has begun. Energy shares are now oversold.

A rebound rise in the dollar is getting started, which is coinciding with the D decline in gold. The dollar index rose above its 5 week moving average for the first time since September and it's now firm above 81.50. It could easily rise to 84, but above 84 means a sharper rise is underway and it could then rise to test its major downtrend at 88. A downward correction in the currencies is underway. The Canadian dollar was the leader and the euro was the last hold out as it jumped up to another high last week. But the euro is clearly overbought (see Webextra) and it's poised for a breather decline. The euro is now vulnerable to a further decline by staying below 1.3450. It could decline to 1.30 and still be firm. The Swiss franc and British pound are now under pressure below.8730 and 1.93, respectively. If the others decline and stay below:.8050 for the Canadian dollar,.6995 for the Kiwi,.7520 for the Aussie and.9500 for the Yen, a steeper correction will be underway. As we said two weeks ago, if you want to take some profits, now's the time to do it.

The Bush rally in the stock market may be ending. This week's fall in the market caused the Transports, Nasdaq and the Dow Jones Industrials to decline below their 5 week moving averages. This means if they now stay below this level at 3755, 2150 and 10720, respectively, it is the first sign of vulnerability. The market could then decline to its next support at 3580, 2050 and 10400, respectively. The Transportations have been the leader in this rise. It's resisting at its 1999 high and it's overbought both on a medium and long-term basis, which means it's now poised to decline further. If you have DIA, QQQQ and SPY keep close stops and sell if broken.

The world equity markets are following. Hong Kong and Mexico, which have been some of the strongest, are now declining as well.

U.S. bond prices continue to form a top as the 10 year yield has been bottoming since October. If the 10 year yield now stays above 4.20% and rises above 4.39%, the trend will turn clearly up for long-term rates and down for bond prices. T-Bills jumped up yesterday to an over 3 year high, which was reponsible for the fall in stocks. The trend is strongly up above 2%.

The January issue will be e-mailed and faxed on Monday, January 10. The print edition will be mailed next Wednesday. Wishing you the best for the New Year and until next Wednesday,

Pamela and Mary Anne

Thread gesperrt

 

gesamter Thread:

• Aden - Emerald, 06.01.2005, 07:53