Silver has shrugged off its high-volume reversal of five trading days ago and has moved to higher highs on the back of a continuing and precipitous drop in the U.S. Dollar. This is an anomalous move, and demonstrates that we are in unusual times.
As we see in the chart of the SLV from 2009, whenever silver has reversed or sold off from a peak after a strong price move, and has done so on massive volume, that has tended to indicate a short-term peak in the metal. This time, however, QE2 is in full effect here as the metal is simply pushed higher by the continuing drop in the dollar, which is quite steep at this point. There is still potential for a pullback in commodities based on a possible snap-back, oversold rally in the dollar, but so far that has not happened. In the meantime, we believe last week's sell signal was valid based on historical precedent, and chasing the SLV now is not advisable. We must be patient and wait for a new entry-point to present itself.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2021 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.