Silver Entering Ludicrous Mode

  Equity markets stalled with all the key US indexes closing down, reversing a strong start for the week. The sell-off was led by the Nasdaq 100, down -1.49%. The one exceptional move was in precious metals which broke free of its shackles of trading in lockstep with equities, led by silver that rose + 17.7% for the week. It was the biggest weekly move in over 40 years.

This sort of reminds me of the days on the floor of Comex during the start of the Hunt Brother’s attempt to corner the silver market.  It is the wake-up call of a decade’s long slumber. The core fundamental drivers are even bigger and more powerful than what happened back then.

Fed/Central Banks' easing and global fiscal policies are at extremes (the ultimate outcome ending with the concept of Modern Monetary Theory) that could make the 70’s inflation look tame.

If one extrapolates just based on recent history, (not the 1970’s but 2011), silver could be seven times higher than its current price relative to equities. If the belief that the Central Banks have lost control (or their minds) becomes a given then “Katy bar the Door” as there will be no stopping those Robin Hood traders from loading up on precious metals which will make the run-up in Tesla look like a practice session.

In the world of large cap and tech stocks, Friday was an interesting trading day.

Lots of those stocks touched down on their 50-DMA.

To name a few: JD, Baidu BIDU, IQ, Netflix NFLX and Microsoft MSFT.

With sentiment or risk on/off gauges flashing bearish, these big guns are at make or break points for Monday.

Any of these could leave more distance between them and their 50-DMA. Or they can easily break them and lead the whole market significantly lower.

After enjoying a week or so of low volatility, the past week ended with fear returning, thereby forcing traders to pay more attention.

The dollar declined even further, while the metals-gold, silver, palladium, copper, and platinum held gains or posted more gains.

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