Stock Futures Bounce Back Up, Silver “Short- Squeeze” Pushes Price Up

Stock Futures Bounce Back Up, Silver “Short- Squeeze” Pushes Price Up

European and US stock futures are set to bounce back up on the first trading of a new month. Traders see the last month’s sell-off as a major opportunity, and this has pushed all the equity indices higher with decent gains. More and more people are getting the vaccine, and economic numbers have started to recover while the fiscal and monetary policies around the globe continue to support global economic recovery.

Investors have ignored the weak economic readings out of China. The Chinese manufacturing activity growth slowed during the last month, and the Caixin M/Market manufacturing Purchasing Managers’ Index (PMI) also failed to impress the markets. The PMI number came in at 51.5 against the forecast of 52.. The most important factor to note here is that the number is above 50, which means that the Chinese economy is still growing.

The Nikkei index gained 1.41%, the Shanghai surged 0.40%, the HSI advanced 2.07%, while the Korean Kospi index scored gains of 2.15%.

In the commodity space, we see a lot of bullish action for Silver. The metal jumped over 7% as Reddit traders are after the short squeeze play here as well. Last week, we saw traders going after the most shorted stocks on Wall Street, such as GameStop, AMC, BlackBerry to name a few. Now, we see that these traders have also shifted their focus on the metals markets as well. This pushed the silver futures up over 8% last night when markets opened after a weekend break. This 8% move was the largest move for Silver since 2013.

Silver related stocks are also likely to remain highly volatile today as the metal’s price rips to the upside. Coeur Mining and Pan American Silver are likely to build on their massive gains that we saw last week. Both stocks rose over 15% approx on Friday. The iShare Silver Trust also jumped higher by 6%. “Silversqueeze” is highly trending on Twitter; hence traders need to make sure that they continue to monitor this hashtag on Twitter.

After Elon Musk’s tweet last week during which he changed his bio on Twitter to Bitcoin, the digital asset failed to hold on to its gains, and over the weekend, we did see some upward action for the Bitcoin price as well. Having said that, the XRP coin certainly saw some serious whipsaws as it literally doubled from its recent low of $0.20 and went up as high as 0.47%. The thing about XRP is that traders do know that it is the third biggest coin by market cap and small retail traders love this coin because it is not as expensive as Bitcoin. So they can buy a large number of XRP with a small amount. The compounded percentage gains give more satisfaction to retail traders. If XRP wins its case against the SEC, we could see some serious upward moves for the XRP.

Investors are hoping that oil prices will continue to move higher as the vaccine rollout continues in the oil market. There is no doubt that the vaccine rollout process remains very unstable and slow. However, no one expected this to be all smooth sailing. In terms of price action, consolidation continues, and the WTI crude oil price continues to move sideways. Having said that, the bull trend is strongly intact as the price is trading above the 50, 100, and 200-day SMA on the daily time frame.