As you can see the similarities were striking indeed.. Furthermore I concluded that a major bull run isn’t terminated that easy. The HUI run of 2003 was terminated only after four major attacks on its 50 dma after breaking its long term resistance of 150 while the HUI run of 2006 only tested its 50 dma twice so far after breaking its long term resistance of 250. The chart below visualizes this painfully clear.

Now here’s a small update on the current situation:

The HUI tested its 50 dma again on February 27 and again it bounced of as I suggested it could do in our dispatch of Feb 27 titled ‘HUI remarks HUI - Crash or Launch?’, see chart next chart:

This was the second attack on the HUI’s 50 dma (HUI 303) since it broke out of its long term resistance at 250 and again it bounced off and is trading near 320 now. So where to go from here?

Well, as said before no-one can predict the future so neither can I but when you visualize the 2003 situation vs the current situation one could conclude that a HUI run towards the 430 mark can’t be ruled out easily.

Highlights:

• HUI 50 dma only tested twice since break-out of its long-term resistance of 250, in 2003 HUI tested its 50 dma at least 4 times after breaching it long term resistance of 150.

• As long as up-trend B remains intact there’s no rush to sell. B trend-line 2006 similar to A-trend-line in 2003.

• HUI gained 72% after breaching its long term resistance at 150 in 2003

• HUI gained only 40% (max) after breaching its long term resistance at 250, a similar move as in 2003 would launch the HUI towards the 430 mark.

You want to read more?

Please feel free to obtain a free (edited) edition of ‘The Gold Discovery Letter’ – March Issue – by clicking HERE

Eric Hommelberg

The Gold Drivers Report/

The Gold Discovery Letter

www.golddrivers.com

-- Posted Sunday, 5 March 2006 | Digg This Article