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Silver jumps in attempted short squeeze

UK100 – Daily Candlesticks
Source: GKFX / MT4 (January 29, 2021)

The UK 100 index has hit a confluence of short term and longer-term support near 6500. The test of the support comes after the largest correction for the index since it broke higher in November. A rebound would confirm the uptrend, while a move lower raises the prospect of a false breakout.
 

TAKEAWAYS


•    Silver closed nearly 5% higher on talk of squeezing ‘most manipulated on earth’
•    Dow bounces 300 pts in comeback from worst day since October
•    US dollar bounce pauses before month-end rebalancing
•    US brokers put restrictions on buying short-squeezed stocks
•    Apple stock sinks 3.5% in ‘sell the news’ move following record quarter
•    Novavax says covid vaccine is more than 89% effective
•    AstraZeneca supplies issues escalate in European Union
•    DAY AHEAD: France GDP, Germany GDP, 
 

GURU WISDOM


“Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett
 

MARKETS


*Daily closing price
↘ EUR/USD    1.2141        (-0.21%)
↘ GBP/USD    1.3665        (-0.15%)
↘ USD/JPY    103.77        (-0.02%)
↗ S&P 500    3855.36    (+0.36%)
↗ Hang Seng    30,159.01    (+2.41%)
↘ Gold        1855.18    (-0.10%)
↗ Oil (Brent)    55.70        (+0.81%)
↗ Bitcoin    32,316        (+0.06%)
 

NEWS

 

Reddit takeover


The short squeeze phenomenon started in the WallStreetBets Reddit group came into some institutional resistance on Thursday. First Reddit closed the group before reopening it. Discord closed the group’s chat but then reopened it. Following that, numerous US online brokers stopped trading and/or raised margin requirements in the most volatile names including GME and AMC. As of Friday, some brokers are allowing limited trading to restart. The reaction to the restrictions from the traders in the forums on Friday could have wide-ranging implications for the broader market. 
 

Silver pumped


The suggestion on WallStreetBets from one user that silver is a ‘one of the most manipulated’ markets and should be worth $1000 not $25 helped propel the precious metal, a related iShares Silver ETF and silver mining stocks higher. 
 

Europe’s vaccines


Disruption in the supply of AstraZeneca vaccines is weighing on the ‘reflation trade’ in Europe with banks and other cyclical stocks underperforming. The news has brought down major indices like the DAX, CAC, IBEX and FTSE MIB in recent days but they finished off the lows on Thursday.
 

DAY AHEAD 


*Times in GMT
06:30 – France Gross Domestic Product (QoQ)(Q4) Prel [    -4 % Exp vs. 18.7 % Prev]
07:00 – Germany Gross Domestic Product w.d.a (YoY)(Q4) Prel  {-3.4 % Exp vs. -3.9 % Prev]
08:55 – Germany Unemployment Rate s.a.(Dec)     [6.1 % Exp vs. 6.1 % Prev] 
13:30 – US Core PCE Price Index (YoY)(Dec) [1.3 % Exp vs. 1.4 % Prev]
 

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