A massive upleg?

The indefatigable and ever-insightful Adam Hamilton of Zeal Intelligence has come up with another big-picture analysis -- this time of a repeating pattern in the rise of HUI, the American Exchange's index of unhedged gold stocks.

Hamilton shows that in its bull market to date, HUI has advanced in stepwise fashion, with each surge followed by a period of drifting at a level higher than the previous consolidation. He calculates that the average increase in HUI in each surge has been 136%.

He suggests that we may be in the early stages of a fourth massive upleg, which, if it stays true to form, could take the HUI over 700 -- roughly double its current level -- before next summer.