By: Bastian Rubben
Wall Street jumped yesterday over 4% in a rally that you see only after outstanding news or sharp declines. In this case, there is not any encouraging news in the horizon, so the reason for the sharp risings is the short-squeeze phenomenon. The short-positions covering started on Monday and it turned out to be a very aggressive short-squeeze that pulls buyers into the market. The institutional cannot stay behind too long and they might have pushed their money to the market and supported the rally.
This bullish momentum of the stocks helps the commodities market, which have been sleeping for two months. Corp, oil, gas, gold and silver – all of these instruments are getting attractive again.
The Gold has been moving along the uptrend line, which has been supporting the precious metal since the price reached the low of $1580 on the end of September. The gold is now moving towards $1800 and if it gets there, the "cup & handle" pattern will be completed under that resistance.
The Silver's daily chart has been following the gold's daily chart since the bottom from two month ago. The metal found a support on the lower boundary of the channel that it is moving in, and now rising towards the upper boundary at $33. If the silver fails breaking this resistance, it might fall back to $29-$30.
