NFTRH; Precious Metals

There is noise this morning about the Reddit crowd getting involved with silver. There is also noise about brokerage/trading accounts going down across multiple platforms, including my own Fidelity account. I have no clue what is afoot in the markets behind the scenes, but something is up even if just a glitch in the matrix.

I am going to disregard all of that functionally, and just play it by the technicals.

CEF, the gold and silver bullion fund I hold popped above the daily SMA 50 after holding the SMA 200. That is the first thing it needs to do to go bullish. As it stands technically, it looks constructive.

HUI (weekly) has recoiled back above the neckline and thus, at this moment there is no active H&S.

HUI (daily) shows the re-taking of the neckline along with the alternate scenario of support beginning at the 260 area and the channel bottom. Still below the moving averages, it remains vulnerable to lower support testing at least, until/unless it takes out the moving average convergence.

GDX and GDXJ are similar to HUI in that they are below their daily chart moving averages. The silver ETF however, is gaining attention amid this Reddit noise. Much like CEF above, it held the SMA 200 (precariously) and is making an attempt at the SMA 50.

Using SLV to view silver, we have a hold of the daily SMA 50 and a shot upward. If this is real it would reestablish silver’s uptrend.

Bottom Line

The above could be a first move to end the correction. Silver is leading, which would not only benefit the precious metals, but also the greater inflation/reflation trades. We have had enough head fakes and whipsaws during the correction to make your head spin. So it would be worthwhile to await confirmations before getting too excited. But when this correction ends I am expecting the result to be big upside (as in the HUI 500 target) because of the duration of the correction, which has cleaned out the sector as needed.

Keep an eye on silver’s leadership. Here is the Silver/Gold ratio (SLV/GLD).