What to look for in metals to determine if the recent breakout was a head fake.

In this post I called a breakout in USLV (which was intended to be a proxy for all precious metals and miners).

Since then there has been good movement up.  But these markets are tricky and so the only way to play is with fear and discipline.  Thank you for that line, Kurt Russell.  The breakout does look real but it has to survive a back test of the resistance turned support line before it can be trusted very much.  The red model predictions tell it all.  The 2nd wave pull back should be a strong one because the markets need to test the convictions of buyers.

A back test of that line which holds will send me running into USLV.  Why?  Because if the back test is a 2nd wave then the next wave up will be a 3rd wave and it should contain significant gaps and it should be no shorter than wave 1.