It wasn’t just two weeks ago that there was a surge in internet searches and news stories surrounding the silver market as a mania erupted over the idea that WallStreetBets could make silver go up like they did Gamestop. I’m afraid most people who checked into silver two weeks ago have now forgotten about it, but now is not the time to ignore silver. I have been an owner of silver and silver mining stocks for awhile now, so it was fun to see it gap up on those rumors, but the morning of that gap up I wrote that I didn’t think a short squeeze was really going to happen.
And silver sold that news, but it did not crash to nothing like Gamestop and AMC and their other short squeeze plays did. Instead it sold the gap of that day and has held up over the past two weeks, even with some weakness in gold prices last week. This is all a great sign for silver prices and silver ETF’s such as SLV.
You can see how that gap up day influenced SLV on the above chart as it brought a massive day of trading volume in the ETF. Interestingly, the on balance volume indicator has held up ever since then. It is generated by adding and subtracting a running total of the up and down volume days.
This action suggests to me that it is only a matter of time that we will silver go up, and another move up is what will finally start to draw the masses into the silver market for real. The silver short squeeze got their attention, but it is only the next rally that will compel them to buy, as they need to see higher prices to want to chase. Major silver stocks HL and PAAS have the same basic chart pattern as SLV, but also pay dividends to their shareholders.
I own both HL and PAAS. I also own various energy, mining, and shipping stocks, among other things, although the latter is a sector that has now only come alive in the past few weeks. Take a look at SFL, which pays a roughly 8% dividend.
SFL completed a magic W pattern, or what people like to call a reverse head and shoulders bottom.
I will stop talking about this, but one thing that I couldn’t get out of my head this weekend was something the Robinhood CEO said at the hearing last week. He claimed that his app educates investors. This just isn’t true and makes me mad when I think about it more.
I know am complaining too much about Robinhood traders, instead of trying to help them. It is not their fault that the app is designed the way it is. I now realize that the reason why it has zero real information on it that people can base a decision on is that the brokers main goal is to simply generate revenue by getting people to do as many trades as possible, instead of giving them the type of information that can help someone invest in a good stock that they can then hold they just show people daily price action, so people end up chasing that and jumping in and out with costant trades spinning their wheels. That means more profits for Robinhood as they make money per trade, but it is creating an entire generation of dumbed down traders, as they have zero interest in actually educating people as they claim.
So today, I am going to stop complaining about it and try to help some of these people, who know very little about trading, with a new series of videos. This is video number one in what will be a free stock trading course I am calling Stock Trading 101. In this introduction I talked about a few key information resources someone new to the stock market should use to help get themselves access to good information and started. Most people are getting into the market via trading apps with no other tools, which they need to get a successful start, so it is my goal to get them moving in the right direction.
Now what do you think is next for silver and what are you watching for in the markets this week?
Let everyone know.
I started something new last week and that is I am opening up my daily morning posts at the bottom for comments. My goal is to make this a water cooler type spot where we can talk about the markets together and share ideas. Check it out. If you got any questions or comments just scroll on down to the bottom of this post. It’s fun. If you are reading this on a mobile phone it might just be a little box that says leave a comment that you need to click to read the comments (I’m trying a wordpress plugin today that loads the pages faster on mobile phones as more and more people are using phones and apps to do everything).
-Mike
