What a time to be alive. And what a time to be a Silver bull. Even though we Silver bulls love the metal for the favorable industrial and monetary catalysts ahead, maybe a WallStreetBets short squeeze is what we need to kick it up a notch! Now Silver is always volatile, so keep that in mind, but the metal was at one time over 6% today. A big technical resistance has been broken, but before we look at the charts, let’s see what the boys (and gals) over at WallStreetBets are cooking up.
This post caught my attention:
Yes, that’s right. The biggest short squeeze in the world. And taking it to the banks like JP Morgan, who are often quoted as the largest silver manipulators with the largest silver short position. Many are dubbing what we are seeing with WallStreetBets and short squeezes as the French Revolution in Finance. I can’t think of anything more fitting than short squeezing the metals market.
For those that do not know, here are some facts regarding the paper contracts in Silver and Gold. When I go line up to buy physical bullion, my purchases do not impact the prices of Silver. The paper market dictates the price of Silver. Since it is paper, and not many actually take physical delivery of Silver, large funds and banks CAN and HAVE shorted more than the entire world’s supply of Silver. Many Silver bulls think that this manipulation is what has been keeping the prices of both Gold and Silver suppressed.
Another way to look at it would be stock piling. We know nations like Russia, China and Turkey just to name a few, have been stockpiling metals. Best way to do it would be to short the paper contract while buying the physical. I mean you would want cheaper prices if you are stock piling right?
So we know manipulation exists, and now WallStreetBets turn their eyes on Silver.
Silver was up over 6% at one point this morning. We still have a lot of time left in the trading day, but remember, Silver is volatile. It is not for the faint of heart, especially if you are trading it.
Technically, Silver has held the important support at $25. A big and important psychological zone. There is a major resistance at $28 which I want to see be taken out, as it is a major resistance zone on the weekly chart. We clear $28, then $34 per ounce Silver can be reached sometime this year.
For those wanting to trade and front run this break, the $26 zone was resistance on the intraday chart. We broke out above $26, and even pulled back to retest it. The buyers have step in and are holding thus far. Initiating trades with a stop loss below the $26 zone can be considered with proper risk vs reward.
Over on the Equity Guru Trading Discord Channel, we took a look at the chart of First Majestic Silver last night. We had it on our radar as the breakout contender as it was near resistance at the $14.80 zone. Here is how the chart looks this morning:
A nice 30% plus popper/gapper currently. We are seeing gapper pops on Endeavour Silver, Fortuna Silver, MAG Silver and Pan American Silver. For the move in First Majestic, it is definitely worth taking a look at shortsqueeze.com. Short squeezes and heavily shorted companies is the play as the retail traders nullify all the stats and models of institutional shorts. This is what we get for First Majestic:
There is a large short position which would explain the price action in AG. Watch this for the days to come.
Really liking the break above $26 on Silver, the fundamentals and technicals are great which is why I am a Silver bull. Is this the year we see the Silver Slingshot with a helping hand from WallStreetBets?