In the latest Premium Update I wrote the following:

"Ideally, the most powerful combination under current conditions would be to see the PMs bottom along with strength in the general stock market, and a breakdown in the USD Index."

and

"Unless we see a sharp move above this line (89 level) on Monday or Tuesday, the technical picture remains bearish for the general stock market."

This is exactly what happened on Monday. The prices did not plunge on Tuesday, and today they are also considerably higher. Generally, such an invalidation of a clearly visible chart pattern (and the head-and-shoulders pattern has been very clearly formed during the previous two months) is a strong signal in the opposite direction.

Since the head-and-shoulders formation is bearish, and it has been invalidated by this week's price action, it seems that higher price are to be expected. The above analysis applies to both DJIA and S&P 500 along with their ETFs, so this signal is significant.

The precious metals sector has been lately influenced by the situation on the general stock market, and the correlation has been positive meaning that PMs moved on average in the same direction as the main stock indices. This means that the positive action that we have just witnessed on the general stock market is also positive for the PM sector.

Since the main risk factor (bearish situation on the general stock market in the short (!) term ) that could ignite a sell-off in the precious metals is now much smaller, I believe that entering long positions here is justified from the risk/reward point of view.

I have already sent a Market Alert for the precious metals sector about a month ago (as the risk is in being out of this market, not to be in it), but I realize that many Subscribers prefer to buy around the bottom, instead of entering the market at once, and there are also many, who prefer to enter short-term trades only. Therefore, I'm sending this alert as I believe that we currently have another buying opportunity in the PM sector.

Day-Traders might want to wait for a small pullback before entering a new trade, but if you are ready to hold PMs for longer than several weeks, then I believe it may be profitable to open new long positions right now.

Sincerely,
Przemyslaw Radomski