The Adens cautious on current corrections

By Peter Brimelow, MarketWatch
The Adens recommend holding current positions but preparing to sell. Overall, they're distinctly more cautious than when I last looked.

On stocks they write: "The major trend identifier is at 8,965, and if the Dow were to decline and stay below that level, we'd recommend selling. For the other stock indices, their major trend levels are at 952 for the S&P 500; 1,840 for the Nasdaq; and 3,460 on the Dow Transportations. So you'll definitely want to keep an eye on those numbers this month."

The Adens believe that record global debt levels will inevitably translate into hyperinflation, but they also have great respect for the authorities' ability to stave off the inevitable. To gauge how this conflict is playing out, they watch long-term interest rates.

They write: "Bond investors aren't stupid. They see what's going on, and they're moving toward the exits. ... How will we know when it's happening? As we've often discussed, the 4.65% level on the 30-year yield will be our guide. This 80-month average is super long-term and it identifies the mega-trend. If the bond yield rises and stays above that level, it will mark the final confirmation that big inflation is coming, the decline in rates that began in the early 1980s is over, and interest rates are going much higher for years to come."

The Adens' current take on gold: They say that what they call the "C Wave" -- which carried it above $1,200 -- is over, and a "