Gold Setting Up For Big Move
The metals are setting up for abig move that could go either way, although we believe they will break out tothe upside. The trading range is getting tighter and tighter, which onlyindicates a huge move is on the horizon.
When markets start to compressand their trading ranges continue to narrow, all signs point to a big move.This is exactly the pattern that we have seen in the metals as the daily rangesbecome untradeable.
Eventually gold will break out ofthis range. There could be a continuation of the downtrend or a breakout to theupside. The risk-reward model suggests that the breakout will be to the upside,which is what we think. There are too many short positions out there, and weexpect the next rally to start with a short squeeze.
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