When the Leader Stops Leading: A Key Level I’m Watching in Silver

 

As we all know, gold and silver have been enjoying an explosive rally for quite some time now, and without question silver has been the leader of the move. When a trend is strong, I always want to be aligned with the strongest name, and silver has fit that bill perfectly. That said, I’m now starting to see signs that this rally may be getting a little tired. I want to be very clear here, I’m not calling a top. What I am seeing is the potential for a pullback, and that distinction matters.

Above is a 60-minute chart of silver futures, and in the lower pane is gold. Right now, gold is pushing to a new swing high, but silver is not confirming that strength. Instead, silver is making a lower high. That’s classic non-confirmation, and when the leader stops leading, it’s always worth paying attention. This is potentially bearish, and I emphasize potentially because, as of now, there are still no actual sell signals.

When I zoom out to the daily chart of silver, another important detail stands out. We recently saw a very heavy volume day, yet price has been unable to move above that day’s high. Heavy volume often marks an inflection point, either strong continuation or the start of distribution. The fact that silver is stalling below that high tells me buyers may be losing some urgency.

So here’s how I’m planning to play it. I’m not interested in guessing. If silver turns lower and takes out the low of that heavy volume day, I will look to short. That level comes in at 101.70, and a break below it would be my confirmation that sellers are taking control, at least in the short term.

On the flip side, if silver regains its strength and rallies to make a new high alongside gold, then all bets are off. In that scenario, I have zero interest in shorting silver. It’s very possible that silver resolves higher, which is exactly why patience is critical here.

For now, I’m letting price tell the story. No anticipation, no prediction, just waiting for confirmation. Let’s see what happens.

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Rare Earth Stocks Show First Signs of Relative Weakness

 

Today was a very interesting day for the rare earth stocks, mainly because it marked the first real bout of relative weakness we’ve seen in weeks. After a strong run higher, I think it’s important to walk through today’s action and talk about what it may be signaling going forward.

On the left above, I’m looking at a 5-minute chart of REMX, the ETF that tracks the rare earth space. In the lower pane is the SPY for comparison. Right from the open, at point A, we got our first clue that something was different. The SPY rallied straight out of the gate, yet REMX was selling off. When the broad market is pushing higher and a leading group can’t participate, that immediately gets my attention. That divergence is often the earliest sign that sellers are becoming more active.

At point B, the relative weakness became much more obvious. While the SPY was making new highs, REMX was only able to put in a much lower high. That’s a textbook example of relative weakness. It shows that buyers are no longer willing to chase price in this group, even as the overall market remains supportive.

Once short-term support was broken, selling picked up and continued pretty much into the close. There was no meaningful attempt to reclaim those levels, which tells me this move wasn’t just random noise.

Looking at the daily chart of REMX on the right, volume really stands out. Turnover was heavy, suggesting this was more than just light profit-taking. At the same time, the group was a bit overextended after its recent advance, so a pullback here shouldn’t come as a surprise. Strong trends often need time to reset.

Several individual names in the space felt the pressure today, including CRML, METC, TMC, and MP. In the longer term, I still think these stocks look constructive. Today’s action doesn’t change the bigger picture for me, but it does suggest that near-term, it’s probably pullback time.

If we do see continued weakness, I’ll be looking at that pullback as a potential opportunity rather than a reason to abandon the trade. I’ll be watching for support to form and for relative strength to reappear, with the goal of getting long again in the days ahead.

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Relative Weakness Keeps Cannabis Stocks in Limbo

 

Another frustrating day for cannabis traders who are leaning bullish. From the open, relative weakness was on display, and it never really let up. This wasn’t a sudden breakdown or a surprise move late in the session, it was a slow, persistent bleed that played out all day long.

Above, I’m looking at a 5-minute chart of MSOS, with the SPY below it for comparison. The key moment for me was at point B. While the SPY pushed to a new high, MSOS couldn’t follow. That’s textbook relative weakness. When the broader market is making higher highs and your group can’t even keep pace, that’s a warning sign. It tells you buyers aren’t as motivated, and sellers are more than happy to use strength as an opportunity to unload.

Once short-term support gave way, the selling accelerated and carried pretty much into the close. There was no meaningful bounce attempt, just steady pressure. Days like this are tough psychologically because nothing dramatic happens,  the stock just quietly does the wrong thing all session long.

Shifting to the daily chart on the right, today’s candle tells a slightly different story. The range was relatively small, and price remains trapped in a tight four week consolidation. Despite all the intraday frustration, we’re still chopping sideways. That’s important context. This market isn’t breaking down, but it’s also not breaking out. It’s waiting.

And we all know what it’s waiting for: clarity on cannabis rescheduling. With just four trading days left until the end of January, that update could drop at any time. That uncertainty explains the compression we’re seeing. Traders are hesitant to commit aggressively in either direction without a headline.

I can’t help but think back to August, when we were told “just a few more weeks.” Those few weeks quietly turned into four more months. Yes, we eventually got the executive order signing, but the waiting was brutal. I really don’t want to see four more days turn into something longer again.

For now, patience is the only real edge. Until relative strength shows up and price escapes this range, frustration is simply part of the trade.

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Watching 10.30 as Potential Support in RDW

 

Now that RDW is starting to pull back, I just wanted to give a quick update on how I’m looking at this name. Up to this point, the pullbacks have been fairly orderly, and one of the tools that has been helping me time entries is the 13-day simple moving average of the lows. This moving average has done a good job of acting as dynamic support, and so far it’s been working well for me.

As of now, that 13-day SMA of the lows is sitting right around the 10.30 level. That immediately puts that area on my radar as a potential support zone. That said, I’m not interested in blindly buying just because price touches a moving average. A level on a chart is only an area of interest it’s not a signal by itself.

If RDW pulls back into that 10.30 area, what I want to see next is confirmation that buyers are actually showing up. There are a few different ways that can happen. One thing I’ll be watching for is a bullish reversal bar on an intraday timeframe. That would tell me sellers are losing control and buyers are beginning to step in.

Another clue could come from relative strength. If the broader market is weak and RDW is holding firm or starting to firm up near that support level, that’s information. Relative strength during a pullback often precedes the next leg higher.

I’ll also be paying close attention to how the stock behaves early in the session if it’s sitting near support. A tight consolidation during the first hour, followed by an opening range breakout, would be another constructive signal. Tight price action after a pullback often means supply is drying up.

The main point is this: 10.30 is an area, not a trade. I’m watching that level closely, but I’ll only get involved if price action confirms that buyers are defending it. When support lines up with constructive behavior, the odds improve. Until then, patience is part of the process.

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Uranium Stocks Reverse Hard at Resistance

 

It was a big reversal day for the uranium stocks, and the warning signs showed up almost immediately. Right from the open, this group displayed clear relative weakness and that weakness persisted all the way into the close. When a sector can’t find its footing early in the session and continues to sell off throughout the day, I take notice especially when it’s occurring at an obvious technical level.

If you look at the daily chart of URA above, you’ll see price pushed right up into a well defined resistance zone and then failed. That area had already proven to be problematic in the past, and once again sellers showed up right on cue. The result was a very bearish candlestick. We didn’t just print a bearish engulfing candle, we engulfed the previous two days of trading entirely. That’s a strong reversal signal and not something I’m willing to ignore.

Reversal candlestick patterns on their own can sometimes be noise, but when they occur at resistance, they carry a lot more weight. Context matters. This wasn’t a reversal in the middle of nowhere. It happened exactly where you would expect sellers to defend price, which increases the odds that this move is meaningful rather than random.

Another important technical development was the break of the uptrend line that had been in place since the beginning of the year. Trend lines aren’t magical, but they do reflect behavior. When an uptrend that’s been respected for weeks finally gives way, it often signals a change in character. That’s what we saw today.

Volume was also respectable on the selloff, which tells me this wasn’t just a lack of buyers, it was active distribution. When downside pressure shows up with expanding volume near resistance, that’s a combination I take seriously.

Putting it all together, resistance rejection, a strong bearish engulfing pattern, a broken uptrend line, and solid volume. I expect lower prices ahead for uranium stocks in the coming days. 

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