NFTRH; About the Silver Squeeze

Now the gold and silver bug community is on board the short squeeze express, exposing itself as the gamblers and casino patrons (as opposed to sound money advocates) many of them are, trying to run a Reddit style operation aiming at the silver ETF, SLV.

I would think that it won’t work as expected because it’s not a short squeeze on a crappy video game store, it’s an operation aimed at a paper vehicle with the intent on driving up the prices of all that above ground silver and the miners and explorers of what’s still underground. But in the very short-term, there is this…

The USD dollar is doing what it was doing…

…while the Gold/Silver ratio, its usual running mate, is breaking down. The implication is that the upside manipulation on silver is having some effect already.

If it does work, consider that the size of the silver market could make it less dynamic and more lasting than the play on the stock of a crappy game store.

As to how to ‘play’ it? The website that claims to have started it all has a list of silver stocks to buy, many of which are very speculative (I would be very careful there and at the least use your own preferred silver stocks, if applicable).

For my own purposes, I increased my CEF (gold and silver bullion fund, selling at a 4.24% discount to NAV yesterday) position yesterday and that was it. Now I’ll have to decide whether to play the silver bullet more seriously. I hold CEF, HL, MAG, SILV and SGSVF. That will depend on the market and the feel I get about this attempted manipulation. As you may have noticed with broader stocks, I am not averse to momo’ing (chasing momentum if I feel more momentum is ahead) when needed.

“This is the short squeeze era” claims the authoritative writer of the call to action. It smells to me like the gold bug community going full frontal casino patron, wanting in on the game. Unfortunately, the game is already exposed and it was summarily broken, if Gamestop is a guide.

gme, gamestop

However, I am not going to count anything out. Right now all we know is that there is a push to induce (I would assume) the big, evil banks and COMEX boyz to cover their SLV shorts, inducing a massive squeeze on the price of silver. If it works your physical silver, silver ETF and/or silver miners will explode. But even if it works, the aftermath, from whatever upside price is reached would likely be a new bear market. So please just keep that in mind.

In short, I am much more comfortable managing a normal bull market (which this has been) but if this call to action by the gold “community” of Reddit wannabes works, it will likely bring about its own destruction, possibly after making players (face it, that is what we are if we play this operation) rich.

Will it work? I have no clue. The last time silver bugs were bull horning silver to $50 it began a crash to 13.62 with a bear market low last year at 11.64. I hear a gold bug proclaim $1000/oz. for silver and I prepare to abandon my measured, sensible management of a bull market and keep an open mind about everything from big upside (let’s work on $50 before $1000, okay Boyz?) to a future crash and bear market.

Meanwhile, I’ll take it as it comes and play as anything but a true believer.

A final thought; when looking at the silver price simply as a TA this is completely viable in its own right because the silver price held its up-trending SMA 50 and as such a successful break through resistance and a new high could easily bring on $50 eventually.

That is because, as we’ve reviewed in the past, there is very little resistance from this short-term resistance zone to the 2011 high. Maybe some disturbance at 35-36, but that’s it.