All the signs are in place for a metals bottoming (90% odds on this call):
- Price of metals below the cost of production
- Miners did big layoffs, headcount reductions even in corporate staff
- LBMA running very short on physical metals
- China demand is now outpacing India with no end in sight
- Bernanke appears to be losing control of the bond market
- All the weak stocks now rallying which means the end of the credit Ponzi is probably near
- Crazy fight between shorts and longs recently leading to dramatic daily swings and huge volume, especially in USLV.
- COPX just broke out as well
- Well formed a-b-c consisting of 5-3-5 that led to a higher low (i.e. an inclining double bottom or inverted owl ears). Today's break out gap up is good technical evidence that the wave count below is correct.
Always watch out for the break down back into the channel of course. But this looks like 3rd wave action so I think the odds of that are low until the small 5th wave up is complete. If we see 5 waves up here like we just did in TNX then that is a second confirmation of trend change for metals. They hate silver at $19. They will love it at $28.
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