Silver has been big news the last few days… with some idiots suggesting that it’s the next gamestop.

Well… it did hit an 8 year high, and promptly crashed.

This is retarded, and it all stems from this baseless conspiracy theory that JP Morgan has been shorting silver at scale to keep the price surpressed for years. (they have a big short in the US and a big long in London, perfectly balanced)

Anyway, let’s look at the charts.

This is a FAILED BREAKOUT attempt. I’d like you to imagine what it would be like buying Silver last week. You see the price skyrocketing, think that it’s going to break out.

Unfortunately every idiot in the world thinks the same thing at the exact same time as you (idiots of a feather FOMO together).

Because of this the price spikes AND there is a temporary exhaustion of buyers, since everyone FOMO’d in already.

So price hits an 8 year high. All the bagholders can finally “get out with a profit” so there is built in selling pressure at any major high.

This selling pressure, plus the exhaustion… virtually guarantees a mini crash.

And Gold went down too, but just a little bit, not the massive crash that Silver caught. Which tells us that the move in Silver is all overblown emotions and idiot trading, not fundamentals.

The lesson is clear. Any time new participants get into a market, they are by definition WEAK HANDS.

A weak hand is someone who bought recently. When you buy something you check the price a lot for the first few days. Your stop loss and your risk tolerance is very low.

At the first sign of trouble, you are probably going to run for the exits.

But if you have been holding Silver for a decade, you probably don’t even check the price very often. 

Totally different situation, right?

New participants = weak hands = vulnerable to shocks.

Hope that helps you understand it better.

The other interesting thing from today is that EURUSD is breaking down like we discussed earlier in the week.

After such a long period of negative USD sentiment this market is primed for a powerful reversal, and you ought to pay attention to it.

That’s all I got for today

Scott