As the majority of the metals market seems to be awaiting a “pullback,” the metals market, like the equity market, has been quite stingy.  But, as I noted in my mid-week update, “by no means am I going to say that I “expect” more of a pullback to be seen, as the minimal number of waves are in place right now to support a break out in the complex within the next few trading days.”  I am still of the same perspective.

On Friday, I did an interview for a financial show, and prior to that interview, the interviewer me told me that most of their guests, who are normally bullish the metals complex, do not think that the metals are going to be breaking out anytime soon.  In fact, he was quite surprised when I explained to him that I see a set-up which can ignite a strong rally in the metals complex at any time now.

Last weekend, I noted that the market has a very bullish set up in place.  And, with silver breaking out over 17.50, it certainly has placed a very bullish potential (1)(2)(i)(ii) structure on the metals market, making the heart of a 3rd wave break out potentially quite imminent.

The issue with high level consolidations as compared to traditional pullbacks is that the market can easily run away from you if you do not see the potential break out set up.  That is what happened back in early 2016, and we have the set up for a repeat performance in 2017. 

You see, normally a 2nd wave will pull back to the .618 retracement region before rallying strongly in a 3rd wave. And, that is where most of the market waits to buy. Thus far, the deepest any pullbacks have been since we bottomed in December of 2016 is a .382 retracement.  Yet, this is often what the metals do.  When they turn very bullish, they offer no “gentleman’s entry” and force most to chase.   So, as most seem to be expecting that the metals are not going to be breaking out “any time soon,” it would seem we certainly have a set up in place to see the metals breaking out very soon.