USLV breaks out. Metals and market will likely diverge now.

In this post I lamented the fact that silver/SLV/USLV had been unable to break out yet.  Although the action was sluggish, my view was that it would happen soon and that it would be marked by a break out of the two resistance lines that have been holding it back

Today we got the expected breakout in the form of a gap up.  This happened while the broader markets were in the red.  All 3 trend lines that I have been watching have now been broken out of.  The odds now favor the longs in a big way as long as that top blue line that was breached today is not broken back down into.  Should that occur, it will require a large rethink of everything.  I model the odds of that happening at 5%.  This is about the lowest odds I will ever give.  In other words, 95% chance that the metals have bottomed.  As always, odds are not certainties and odds makers are not infallible.  So watch your stops.  But if GLD break 123 then other EW analysts that I respect are saying that is their breakout confirmation for metals.   That 123 breakout level is just another data point, just like everything you read in these pages.  But that level is from some of the finest minds on the subject and so it carries more weight for me than Joe Sixpack's views.

I have been on metals bottoming watch since June 2013 and the action has been choppy and sideways.  I have a strong feeling that this is about to change and that silver will play catch up with gold and with the miners.  If you are nervous about the broader markets and if you don't like to play it short, you might want to consider SLV or, more aggressively, USLV because the technicals support them at this point.

My long term thesis was and is that gold and silver are money, fiat currency and stocks are essentially worthless Ponzi schemes and that the world will soon come to its senses about these relationships.  Fools that are nervous about metals and who call gold a "barbarous relic" have put too much faith in their Paper Ponzi.  It is going to blow up in their arrogant faces and many big names like Paul Krugman and other a$$hole Keynesian jerk offs will be completely discredited before the carnage is over.  People will be looking for Greenspan and Bernanke with a noose in hand.  I tell you, these things are coming.   Not because I want them to but because you can't fool all of the people all of the time.   Once the boomers stop contributing to the stock markets and then reverse their direction by pulling money out to live on, by what magick (sic) does anyone think these bubbly markets full of unpayable paper promises will keep their valuations?

Of course, I am just another blogger and one without particularly good readership.  The herd doesn't know about me so what does it matter what I think?