{"id":54015,"date":"2021-02-01T11:43:42","date_gmt":"2021-02-01T16:43:42","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=54015"},"modified":"2021-02-01T11:43:42","modified_gmt":"2021-02-01T16:43:42","slug":"the-rebels-from-reddit-favor-silver","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2021\/02\/the-rebels-from-reddit-favor-silver\/","title":{"rendered":"The Rebels From Reddit Favor Silver"},"content":{"rendered":"

The internet is still one of the most revolutionary things invented. The new level of communication and coordination it gives us is just amazing. Hedge funds could not imagine a sudden coordinated attack that started as a post on Reddit could impact them so hard. The next market in their crosshairs? Silver! <\/p>\n

The GameStop frenzy just let the dogs out. Lately, the retail investors from the famous Reddit chat Wallstreetbets<\/a> started looking towards the iShares Silver Trust ETF (SLV)<\/a><\/strong> as they are looking forward to profiting from the same strategy of short squeeze earlier mastered on GameStop shares. They chose SLV ETF because its shares are backed with physical silver. <\/p>\n

I prepared two silver charts to show you how the retail market force changed the structure and its outcomes.<\/p>\n

\"Silver<\/a><\/p>\n

There is an optimistic scenario depicted in the chart above. It implies the completion of the entire corrective structure. The red leg 2 down is considered to be done as it traveled only 0.618 of the red leg 1 distance. As you may remember, it is the Fibonacci ratio. The joint between legs 1 and 2 looks weird but is yet possible. <\/p>\n

The endpoint of red leg 2 at the same time is the start point of the new CD segment to the upside. I updated the target for it as the C point could have been established higher than expected at $24.06. If the CD part travels the distance of the AB segment, then it could hit the $42.28. The potential profit could exceed 40%. <\/p>\n

I want to draw your attention to the time stickers underneath the price graph. We can see that the AB move up took 101 bars to emerge; the BC part of consolidation consumed 114 bars or an almost equal amount of time. I wanted to show you how long the consolidation phase could last and how tricky its structure. The CD part could be sharper, but I conservatively put the same period as it took the AB segment, and the completion falls at the start of the summer. Let\u2019s see how it goes. <\/p>\n

Not all agree that this retail attack could be as successful as GameStop (GME)<\/a><\/strong>. In this case, another structure could unfold in the chart below.<\/p>\n

\"Silver<\/a><\/p>\n

In case of a failure to the upside, there is a risk of extended consolidation to play out. If the price can\u2019t break the former top with a visible margin, then the price could reverse to the downside to build another large leg down to retest the valley of $21.67 established in September 2020. <\/p>\n

It could be a box type sideways consolidation, and I added the zigzags to highlight the internal structure. The left zigzag down was the first leg 1. The following green zigzag up consists of three legs, and it links the red leg 1 and the red leg 2 to the downside. After the entire structure gets completed, the move up could resume.<\/p>\n

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The epic battle is right here as I write this post. Which scenario will play out?<\/strong><\/p>