Tuesday, July 17, 2007


Take a close look at this chart of gold. Notice the arrows. It almost looks like I arbitrarily picked the best entry points doesn't it. However these aren't my entry points these are times when the commercials had extreme bullish net positions in the futures market. When the commercials aggressively cover their shorts the gold market tends to go up. We had more than a year of consolidation since the peak last May. Look what happened to gold after the last large consolidation in 05.