The Lone Ranger’s horse was named Silver. When he wanted to get that horse moving quickly, he cried “Hi Ho Silver, away!” – and off they’d go.
Silver certainly has had a pretty strong call for action lately, but not from the Lone Ranger. Ordinary investors are all over this stuff. Like gold, which I covered last week silver is moving – at a pace that probably can’t keep going. Don’t get me wrong—the chart looks fantastic. But the momentum oscillators are getting overbought, and retail investors getting excited like I haven’t seen since oil in 2007 and tech stocks in 2000.
I copied the sentimentrader net hedgers chart for gold on last week’s gold write-up. Below is the hedgers chart for silver from their research. Notice the similarities to last weeks gold sentiment chart? A move to the lower red line is considered a sell signal –its suggesting proportionally high participation by dumb money vs. smart money. A move below that line as we have now is more disturbing.
As always, we must defer to the charts first – and use the background studies like sentiment as forward-looking vehicles. As such, I would expect that silver probably has more upside ahead of it – given the growing moneyflow and fabulous trendline break and base break. But its overbought. Further, I will view this commodity just like I do gold – that is, as a momentum vehicle that is playing a game of musical chairs. Sooner or later the music stops, but it’s fun while the music still plays. I do believe the trend will remain strong for silver for a while, but I aim to keep a close eye on it, given the enthusiasm by retail money.
Speaking of music – I’ll be humming Troopers lyrics if I go back into gold or silver: “We’re here for a good time. Not a long time. So have a good time – the sun can’t shine every day!” . Here’s a link to the song if you are unfamiliar with Trooper.
BNN
Regular readers know that I am a monthly guest on BNN’s MarketCall shows. BNN has asked me to team up with my Associate, Craig Aucoin on a special MarketCall episode this Wednesday July 13th . The show airs at 6:00pm. Craig is the resident Fundamental Analyst here at ValueTrend. ValueTrend is unique in that we separate the two disciplines of Technical and Fundamental Analysis. Stocks are reviewed independently by each analyst, without interference or influence. Thus, if I pass a stock technically, Craig must then review the stock independently by using his quantitative and qualitative methodology. Only if a stock passes both of our analytics will it go onto our approved list.
Viewers of this special show will have the unique opportunity to hear from both of us when calling in with their stock questions! Combining these disciplines can increase your portfolio profitability and stability. You won’t want to miss this special edition of MarketCall. Be sure to mark it in your calendar!
6 Comments
How are you feeling about the SP500 breaking above resistance?
A breakout is positive–we bought a little more equity yesterday afternoon–but will still maintain some cash (now at 20%) for the summer. See today (Tuesday’s) blog–should be posted by 10:00am
Keith… After the u.s. election, how do you feel about buying the hxd as the market bull finally comes down and takes a rest after an eight year run?
Seasonal strength for markets begins after the election so I don’t know that I would plan on bearish strategies unless the charts start to show signs of deterioration
you have lots to talk about on BNN do investors go all in here? lol
yeah–just posted a blog to that question!