The U.S. dollar dropped the most in 10 years yesterday, driving the euro and other currencies up strongly. If the dollar index now declines and stays below 82.50, its mega downtrend will remain intact, signaling the dollar is likely resuming its bear market decline. As for the currencies, they'll show the first signs of renewed strength by rising above 1.3450 euro, .8840 Swiss franc and .7000 Australian dollar. If you have currencies, this is not the time to sell, but continue to hold on as prices are headed higher.

       It looks like gold, silver and platinum have hit a bottom. They are extremely oversold and lower interest rates are a boost. Silver, platinum and gold shares have also been much weaker than gold, but they are now bombed out, the most ever, compared to gold. Gold reached an over one year low a week ago and it's now stabilizing near the lows by staying above $715 (basis December). Gold will start to look good above the $790-$800 level. The D decline is still underway but the end is at hand. Silver jumped up sharply from its low yesterday. It will start to stabilize above $8.80 and it will begin to look good above $10.50 (basis December). Considering silver's extreme oversold situation, if it closes above $10.50 it could bounce up to $12.50 just to ease this extreme condition. Gold shares are the most extreme of all. If the XAU closes above 96, it could zip up to 125. Copper may have also found a bottom and it may be leading the base metals. If copper now stays above $1.70 and closes back above $2.40, we could see a bounce to possibly the $2.80-$2.90 level. Crude oil is still weak below the $70-$75 level, and even if it were to bounce up to the $80-$85 level, it would still be weak.
       The economy is vulnerable and the global crisis is still ongoing. While we'd like to recommend buying some select positions for a rebound, we'll wait a while because a bit more stability is needed.
       Low interest rates finally took their toll on the dollar. Yesterday's interest rate cut marked the second half point cut this month and depending on how the economy reacts, rates could still fall further. If the 90 day T-Bill rate now stays below 1.20%, it'll be positive for the economy but negative for the dollar. The 10 and 30-year yields, however, have been rising and they may be looking ahead, beyond the recession to future inflation as a result of all the massive government spending. The 10-year yield is currently at 3.94% and if it rises and stays above 4% it will reinforce this.
       The stock market is benefitting from lower interest rates too. As you know, the stock market is extremely oversold. But the Dow Jones Utilities hit a three week high today and it may be leading the way up from these bombed out levels. In the stock market's case, a rebound rise would be reinforced if the Dow Industrials can rise and stay above 9450, Nasdaq 1800 and 3950 for the Dow Transportations. A rebound rise would provide a boost for all stocks, including our remaining recommended stocks which are also extremely oversold. So do not sell stocks for now. Instead, wait for the evolving bounce up, which will enable us to recoup some by selling at a better price.
       Editor's Note: Mary Anne and Pamela Aden are co-editors of The Aden Forecast, P.O. Box 790260, St. Louis, MO 63179, 1 year, 12 issues, $250. Include Weekly Updates. www.adenforecast.com.