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As instability jumps and oil prices rise, GDP all over the globe will take a hit. The higher oil and gas prices go, the bigger hit to growth across the globe. Think of oil prices as a tax on companies and people. This limits their spending thus slowing global growth. The slower global growth, the weaker demand for silver as an industrial metal. In addition, many silver company charts have surged into major double tops. A great example would be Silver Wheaton Corp. (NYSE:SLW). The double top level hit today was $41.85 - $42.35. Silver may not pull back much but could see a fall on the SLV back to $30.00 in the short term. To gain more hardcore guidance, analysis, swing trades and education, join the Research Center. Take a free trial today.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Traders and investors should also realize that the large major banks have not taken a trading loss in months. This has made trading very profitable for these large major institutions. These large financial giants can also borrow capital or cash from the Federal Reserve Bank at zero percent. It has also been rumored in the trading world that these institutions are also using very high leverage for trading that is comparable to the pre-financial crisis levels back in 2007 and 2008. When you think about it, what risk are the large banks really taking? They will just be bailed out by the government if something went wrong.
The big question that many traders and investors are asking today is will the banks buy the dip again? The down trend in this stock market today is severe and very sharp. The decline is broad based and many market leaders have dropped sharply. The financial stocks which have lead the stock market indexes higher since late November 2010 are selling off violently. Today does not look as if the stock market will stage a comeback, however, if there is one thing that we have seen in this market it is that anything can happen at anytime.