Right as rain Chuck checked in…

Bill:
As I have been suspecting, all of the markets are launching out here, leaving the deflationist bridegrooms at the altar. Although you will read that there is a lot of pollyanish investors around, just a cursory review of most of the web columns reveals that most stock market are very skeptical of the markets. The bears still look at the economic statistics to support their gloominess, but the charts of commodities and stocks don't show this. Almost all are positive and reveal almost no signs of a top, let alone the catastrophic "C" wave that so many Elliottwavers are confidently predicting. Just go through the Dow stocks on "Bigcharts.com" on a 2 year basis to see the relentless uptrends in many of the charts, especially with the technology companies.

Two other significant signs of a recovery: The Baltic Dry Index jumped an amazing 22% last week with reports of ships waiting in lines to load stuff, primarily to and from Brazil and China. The second one is the price of copper, up 12 cents today to a new recovery high of $3.08. These are certainly not signs of a deflation collapse.

More importantly to us are the continued high gold-silver ratio at around 62:1 which, if we are entering a commodity mania could drop to as low as 40:1. Secondly, the DGP-DZZ double long-double short ratio remains at a very bullish 2:1. This is the exact level it has held for almost 2 weeks while gold and silver have shot up. This ratio shows a bearish tint by the gold traders.

Another strange but contrarily important sign is in the juniors and exploration stocks. Even with the metals up so sharply, I still see more propensity to sell than to buy. I gauge this by the tendency to see most of the ticks on the bid rather than the ask side. Again, to me this is very, very bullish because the smaller investor is still not just wary but scared of another massacre in gold and in the shares. When these stocks finally smove, the jumps will be astounding.

Finally I have an indicator which has always seeemed to agree with the reknown Midas Sentiment indicator, a complete lack of interest. Mine has more to do with interest by prospective clients who I never hear from again. This is a contrary bullish signal to me.

All in all, although the gold share market continues to be frustrating, this is an immensely positive day. The shock is going to be on the upside, for all markets. Chuck

Chuck went on to say…

Bill:
You and I both know that this means that the totally unexpected is at the door--$50 days up and $1 plus on silver. The base metals breakouts here will favor companies like ECU incredibly since they have rich base metals in their ore. It's the same blindness that hit the markets in 2007-2008 except this thing is going up, most likely culminating in a rabid inflation sometime next year. The Fed will have to pour more and more into the bond market to prevent it from imploding.