Rocks over stocks…
Last week, I explained how I was bullish on commodities.
My reasoning was simple. Metals are breaking out in a big way, both in relative and absolute terms.
Take silver. It just recently broke out of a base that dates back to 2011:
Source: StockCharts
Copper has also been breaking out, rallying 22% since August.
Since publishing that issue, we’ve seen some explosive moves in the commodity space. Yesterday, the iShares Silver Trust (SLV) surged nearly 5%. It finished the day at new all-time highs:
Source: StockCharts
Naturally, this bullishness spilled over into the miners.
The Global X Silver Miners ETF (SIL) popped 5% higher yesterday, and it now appears to be on the cusp of a major breakout:
Source: StockCharts
Pan America Silver Corp. (PAAS), one of my favorite silver miners, performed even better. It surged 11% yesterday on heavy volume, finishing the day at new all-time highs:
Source: StockCharts
This is likely just the beginning for silver…
Take a look at this chart below. It compares the performance of SLV with the S&P 500 ETF (SPY). Yesterday, this ratio hit the highest level since 2016:
Source: StockCharts
The SLV versus the Invesco QQQ Trust (QQQ) ratio is also hitting five-year highs, which tells me that silver should outperform the stock market for years to come.
And I’m not just bullish on silver... I also expect copper miners to play catch-up in the days to come.
I’m also quite bullish on platinum/palladium stocks. My favorite of the group is Sibanye Stillwater Ltd. (SBSW).
Below, we can see that SBSW is in a strong uptrend. In fact, it looks like it could break out any day now:
Source: StockCharts
Based on what I’m seeing from these charts, I may look to add commodity exposure to my Express Trader advisory as we close out the year.
My readers will be the first to know if and when it’s time to take advantage of this strength. To join us in Express Trader and get my three strongest trades at the start of the week, go here.
Right now, we have a full portfolio with three strong stocks already—including a fintech leader, an oil & gas refiner, and a data center operator.
Justin Spittler
Chief Trader, RiskHedge
