Dorsey Wright tracks the precious metal stocks giving an equal weighting to each stock in that sector. Then they calculate the percentage of stocks that are in that sector that are on point and figure buy signals. When the chart is in a column of "X's", an event that occurred this Friday, we say that "Demand" is in control. The most ideal point to be bullish on a sector is when the chart reverses up from 30% buy signals or below into a column of "X's". When the percentage of gold stocks that are on buy signals are at 30% or below it indicates that the market is "Washed Out" - in other words, most of the sellers have already sold and there are few sellers left to push prices lower. This reversal up from a washed out area puts the offensive team on the investment field. Your job now is to score against the market. Instead of trying to eak out a yard at a time, you can now throw the long pass for precious metal stocks that are displaying superior relative strength. Being on offense may indicate any of the following strategies that you will consider for your "investment play book": loosen stop loss points, increase position size, leverage positions if you are a professional trader, avoid selling call options to protect capital, use in-the-money call options as a stock substitute with at least 5 month to go before expiration date, add new positions to your portfolio that are exhibiting superior relative strength to other stocks in their peer group, etc.

This is a major BUY SIGNAL.

Tom Smith

96 | | | || | | | ||| | | | | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |96| 

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86 | | | || | | | ||| |X|O| | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |86| 

84 | | | || | | | ||| |X|O| | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |84| 

82 | | | || | | | ||| |X|O| | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |82| 

80 | | | || | | | |X| |X|O| | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |80| 

78 | | | || | | | |X|O|X|O| | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |78| 

76 | | | || | | | |X|O|4|O| | | ||| | |X| | | | | ||| | | | | | | | | | | | | | | | | |76| 

74 | | | || | | | |1|2|X|O| | | ||| | |X|O| | |B| ||| | | | | | | | | | | | | | | | | |74| 

72 | | X||| | | | |X|O|X|O| | | ||| | |X|O| | |X|O||| | | | | | | | | | | | | | | | | |72| 

70 | | X|O| | | | |X|3|X|O|X| |X||| | |X|5|7| |X|O||| | | | | | | | | | | | | | | | | |70| 

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66 | | X|C| | | | |C|O|X|O|X|O|C|O| | |X|6|X|O|X|O||| |X|O| | | | | | | | | | | | | | |66| 

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56 | | X|O| | |X|O|B| | |6|X|O|X||| |O|X| | |O|X|O|X|O|X|O| | | | | | | | | | | | | | |56| 

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46 | | X|O|3|O|X| ||| | |O|7|O|X||| | | | | |O|X|O|X|O| | | |O| | | | | | | | | | | | |46| 

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42 | | X|O|X|O|X| ||| | |O|X|O|X||| | | | | |O|X|O||| | | | |O|X| | | | | | | | | | | |42| 

40 | | 9|2| |4|9| ||| | |O|X|O|X||| | | | | |O|X| ||| | | | |O|X|O| | | | | | | | | | |40| 

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12 | | | || | | | ||| | | | | | ||| | | | | | | | ||| | | | | | | | | | | | | | | | | |12| 

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