first majestic silver

The Bollinger Bands say FOUR!

November 13, 2005

Last week we showed the fractal similarities of the daily HUI Index in late 2001/ early 2002 versus the weekly chart of the HUI from late 2003 to today. We focused on how the technical indicators from the two periods showed uncanny similarities, and how the HUI Index in the 2001/ 2002 period resolved to the upside- Big time.

In the wee hours of the morning on Friday 11-11-05, I posted on the Gold-Eagle Forum and finished that post with these words. "Oh, and lift-off could/ should be tomorrow and Monday…" And by the end of Friday- Boy was I smiling.

Tonight, my favorite chicken remarked a bit negatively on the current BB relationship of the HUI Index. Though his comments were directed at the current daily chart of the HUI, those comments motivated me to look at the daily charts of the 2001/ 2002 fractal versus the 2003/ 2005 weekly HUI fractal from a Bollinger Band perspective. To me, the Bollinger Bands say, "FOUR!"

I will not verbally go into great detail about the Bollinger Band similarities of the two fractal patterns since I am in no way a Bollinger Band expert. I will say that the Bollinger Band moves in both cases look almost identical. Can you say, "Déjà Vu….II?" Let's add a Bollinger Band brick to the HUI fractal wall……

HUI 2001/ 2002 FRACTAL

Now, let's look at how that fractal resolved, encompassed by our Bollinger Bands.


Let's turn to our current fractal from the "late 2003 to today" period, using a weekly Bollinger Band perspective. This weekly chart looks identical to the 2001/ 2002 daily (1st chart), except for the addition of Friday's up-move. Déjà Vu, anyone? Let's hope the Bollinger Bands are screaming "Four!" at the shorts on the green.


On Friday morning, I tried to post this chart to the GE Forum, but ran into difficulty with the upload. This little formation on the chart, I have named in honor of the GE Forum's Grininbarrett. It usually leads to a big move on the upside.


So, how did the B & G formation resolve?


Let's take a short-term look at the HUI Index where we can see Friday's break-out. If we follow the 2001/ 2002 fractal, we might see some weakness this week; but once that is over…… out on the upside.


A longer-term perspective of the HUI Index shows the uncanny similarity of the fractals using Andrew's pitchforks.


Finally to round out this HUI update, let's take a look at the HUI to Gold ratio, where the HUI has broken out, retested, and now is moving on up.


I apologize for having only written about the HUI Index in recent weeks, but we are entering a very important time for the PM stocks in general at this point, IMO. Also, my time has still been limited by the fire at my office. If you scroll through the GE Forum posts, I did post a bunch of charts on 11-10-05, around 03:40, I believe. Those charts should automatically update, but if you view them, please remember to due your own due diligence. Nothing I post is meant as investment advice as stated, below.

See ya later, alligator.

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