Gold is closing in on its key $4,800 level, which is now both its 5- and 15-week moving averages. The chart below shows that gold's short-term indicator is extremely oversold, while its medium-term indicator is approaching the lows, note Mary Anne and Pamela Aden, editors of The Aden Forecast.
This means if gold can rise and stay clearly above $4,800, the decline will be over. As we said last week, now is a good time to buy new positions.
Silver is similar. Keep an eye on $80. Once it closes above this level and stays there, a renewed rise will be underway. Gold and silver shares are also poised to bounce.
The rest of the resource sector is rising briskly. Copper, aluminum, and tin are rising. Copper will become strong once it rises above $5.80. Uranium is doing well. Crude oil is consolidating at the highs – and it's strong above $90.
The stock market has been rebounding, following its steep decline. In fact, the Dow Industrials, Nasdaq, and the S&P 500 Index (^SPX) all fell exactly to their 65-week moving averages and they’ve been rising from there since then.
This means the stock market remains bullish and this is being reinforced by the Primary Trend Index (PTI), which is also bullish. But in the meantime, the leading short-term indicator is approaching the low area, and it’s not yet oversold.
This tells us that stocks could still fall further in the weeks ahead, so maintain caution.
