Sunday, September 2, 2007

Time for PM to move

Look closely at the two charts and you will notice a couple of things. First the big moves normally occur from a bottom in late summer until Jan.-Mar. You'll also notice that from trough to peak every one of these moves in both the HUI and XAU logged a 100% move. Now notice the monthly Bollinger bands are squeezing down to a very narrow range. This is what has happened prior to big moves in the past. Only this time volatility is drying up even more than in the past. Now let's factor in a couple more positives. The COT is at very bullish levels for both gold and silver, especially silver. We are now in the window of time when the PM "outperform". On top of all that the dollar appears ready for another leg down in the secular bear market. Adrian Douglas has also noted unusual activity in the options market. The same activity seen prior to the big run in late 05 and early 06. Got gold? (or silver)