The stock market had a sloppy day on Thursday after the DOW fell over 600 points on Wednesday, however, the price of silver and gold both went up. Silver in fact is now pausing and trading in a narrow range, apparently getting ready to breakout again. Take a look at the SLV ETF, which people use to trade and invest in silver, to see what I mean.
The SLV ETF is trading in a very narrow range, making for an attractive buy point for traders who want to take a position here. Silver actually has been outperforming the stock market since around Labor Day. Sectors that generate positive relative strength while the stock market nears an end of a decline, as SLV did in October, typically become big market leaders and that is exactly what silver and silver mining stocks are now doing. The S&P 500 bulls and bears are currently battling around its 200-day moving average, while silver bugs are simply flying high.
I own a position in silver giant Wheaton Precious Metals (NYSE: WPM), which has gone up so much from its October low that no one is really debating on whether it is in a bull market or not.
What is helping silver do well is the fact that gold is also trending up, as the US dollar index rally of 2022 lost steam several months ago. In metals rallies the big cap mining stocks tend to lead the action in the metals. So when they perform better than the metals that is a bullish sign.
Most individual investors though are all focused on the action now in the S&P 500, DOW, and Nasdaq. After the close yesterday, NFLX reported earnings and jumped up over 5% in after hours trading to give them some hope and then gyrated wildly. The stock had been down over 3% in the regular trading session.
I talked about the bull and bear debate with the S&P 500 and its 200-day moving average in this video update and the real way for investors to win this year.
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-Mike
