SILVER COT (Commitments of Traders) and Candlestick Weekly Charts; Reddit Trying to Squeeze Already-Long Silver Market

The Reddit folks, or maybe the Red Robin folks, if you combine Reddit and Robinhood,  are trying to move silver today, with some success. It is reminiscent of the Hunt Bro's in the 80's. Silver is a huge market, trading at over 30 times a GME (GameStop which is under a massive short-squeeze the last three weeks) each day, and JPM is in control of a lot of the activity, so the expectation would not be for a big move in silver but +10% and more right now is a huge move and silver tagged 30 this morning.

There was not a lot of shorts in silver, in fact the market is leaning net long, or even call it somewhat balanced, so the short-covering strategy appears odd. The Reddit crew would likely be better served to target the individual tickers and that is where they have experienced success. Some weak short hands will shake out. Silver is a different animal than a stock ticker. It is a commodity and trades in a more liquid market. After a pop for a week or three, silver will likely set up as a nice short. Let's see what is going on.

The COT chart has been a difficult tell over the last few months, like gold, so not of much use, but you can see the tops in price with the red circles and bottoms in price with the green circles. One year ago, silver was at the high with the COT hinting that a top was at hand, and it was. Price falls into the March low when the Fed and Congress starting tossing money around like it was candy. The silver rally begins into the August top when the COT was peaking but noticeable at a nearer area to the center line still yet. The sideways chop occurs since last summer.

Today a pop will occur due to the Reddit gang and up in that red circle is 30-ish and would reflect a matching and higher high as compared to last August. Therefore, the chart indicators can be viewed to see if neggie d is in play, and it would be if the indicators remain below their prior peaks as shown by the thin red lines. That would lock in the negative divergence and a top. In other words, the chart is actually setting up for a potential short in a couple weeks.

If long silver, you may want to consider selling on the way up. The COT bars will likely expand outward as price moves higher setting up the similar situation as a year ago. Interestingly, the Reddit folks may actually be hurrying the topping process along.

The blue arrows show the tight bands squeezing in so a big move is going to occur in this weekly time frame. Price will pop higher due to the Reddit bump but the thinking would be that it will reverse in a week or two, or three. The chart will have to be monitored as price makes the new highs. It would be a no touch until a couple weeks when silver will probably be set up as a short. Keystone is not long or short silver right now. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added: The COT chart is provided by the folks at COT Price Charts and annotated by Keystone.