Long time no contact. The stone over my hole was quite heavy...LOL.

Around the end of May this year I started to wonder, along with many others, where some good enough sized volume might come from to help turn the Juniors up. I figured the best place to start was right in front of my nose, our own market sector, the PM's. For my junior company I chose ECU Silver as I have an interest in it, as do you and many of your readers. For a similar company but further out on the development scale, I used PanAmerican Silver, currently a good producer. My reasoning was that if buying volume was to enter the risky junior segment of our mining company sector, it should probably first begin with people who know the PM market well and who have been long stocks that participated in gold's move higher from 600 to 1000 between Q3/07 and Q1/08. PAAS fit that bill, having moved up from 21 to 44 in the same time frame, and probably serving as home to just the kind of speculative investor that has the presence and experience to seek out risk in the search for extraordinary gains. I believed that at least some of those profitable PAAS riders would start to realize profits and invest at least a portion of their profits back into the riskier junior segment in battered companies with great prospects such as ECU Silver.

So I pulled up the ECU:PAAS ratio charts I had set up a couple of years ago but had not watched closely since. I was not at all surprised to see well established down trending channels, and was happy to see that the latter half of the downward move had set itself up as a falling wedge. So in went the lines and I began to watch these charts across all time frames daily to see if the wedges would be broken to the upside or just fizzle into their nose cones. Well, they broke up, first from the wedge formation and then, surprisingly to me at this early stage, also breaking up above the major downtrending channel lines. What is more, the weekly time frame has also broken up above its 50 week moving average as well, this week, as of this writing. I have been tempted to write about this for you for several weeks but have held off in respect for the smart money that is obviously moving this relative performance of a promising junior upwards against a good producer. I also wanted to see if they had the staying power to move the ratio above all key chart points and this has come to pass this week on the weekly ECU:PAAS chart shown below. The only major technical chart resistance now is the 200 week MA. On the daily chart the 200 DMA was taken out with a bang on Friday, then confirmed on Monday and Tuesday of this week before settling back a bit today for a well deserved rest. While ECU's volume has not increased significantly, the quality of the trading has changed positively with relatively large blocks of 10-20k shares being used to lift the offers when they get to size and large blocks of 20k to 50k being left visibly and comfortably on the bid side of the quotation. The strong positive relative performance of ECU so far has left nothing to be desired.

Link to weekly ECU:PAAS:

Curious to see if this strong relative performance of ECU was particular to PAAS, I went a step further and compared ECU to its closest generic mirror, the HUI index. Here again I found ECU to be in a strong, positive relative performance mode, confirming that ECU does seem to be gaining exposure and interest, if only for the moment to the smart, early, stealth investors of our market segment/sector. The ECU:HUI weekly chart actually closed today above its 200 week moving average. Let's hope we close the week out this favorably.