While so many were getting so bullish of the metals market over the last few months, my work was telling me that we were not likely going to be seeing a major break out just yet. So, I have been waiting patiently for a good set up for another long trade.

But, during my wait, I have seen extremes in sentiment again. At the highs, the extremes were quite bullish. And, now, the fear is starting to creep back into the market.

Everyone seems to be waiting for the next shoe to drop and for the metals to crash down again, with so many pointing to the heads and shoulders pattern which is supposedly about to make gold crash. In fact, today, one of my members on FATrader.com asked me a question regarding the bearish implication of silver breaking a long term trend line.

But, I think silver has been providing us with the clearest indications in the metals market. It had me looking higher as we caught that bottom in November of last year, and it had me looking for a pullback when we were topping out at the end of January. In fact, even in the smaller degree moves, we caught the top in silver last week, and have been looking down for a drop since then.

But, now, silver is providing us with a bottoming indication rather than a selling indication.

On Thursday and Friday, I was outlining to my members what I see as one of the best set ups in the metals market at this time. Over the years I have been analyzing metals, one of the best bottoming indicators I have ever seen is the MACD on the 144-minute chart. In the last seven years that I have been closely tracking it, I think it may have failed twice to correctly follow through with the signal that it is now providing us.

You see, whenever silver seems to be completing a downside structure, and has positive divergences, as we now have building in the MACD on the 144-minute chart, it has forewarned of an impending upside reversal almost every time. While it does not tell us what that reversal will turn into, it has been almost perfect in warning that a reversal is setting up.

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