Early returns Reddit's WSB fails at squeezing silver
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Monday, we witnessed the fear, panic, and greed of traders with a dramatic spike in silver. The initial rally was no surprise as the fear in traders and investors played out over the weekend, getting themselves into a frenzy. The bears were worried about the squeeze, and the bulls were worried about missing the monster up move. Early returns WSB is going to fail, as we wrote about Monday.
We witnessed the panic buy and the emotional trading as we remained short because that is what our algorithm told us to do. We will reverse this morning and be long, not because of WSB but because the price action and trend have changed. As we repeatedly remind members and readers, we follow the rules of mechanical trading with no emotional discretion.
The squeeze that was going to be created by WSB could still happen. Still, as we wrote yesterday, silver is a commodity that is not like a stock making it harder to force action. This is one reason we ignore chat rooms and the news; following them is a losing ticket.
This morning, as of 3:50 am EST, gold is down 16.20 and silver down 1.64. This is a far cry from the big squeeze. We remain short Gold, long Platinum and now long Silver. Platinum is down about 30.00 this morning after failing to take out the highs on Monday.
Remember, trade the news you lose; emotions and opinions have destroyed more traders and investors than anything else. Investors should ignore the day-to-day movement while traders focus on the price action, which is the best map to the markets you will ever have.
Last night on our Monday Night Strategy Call, we talked in detail about Reddit’s WallStreetBets and why what they were attempting would fail. See recording below.
We have also included a registration link for session 4 on Saturday February 6th at Noon EST