Saturday, May 6, 8:15 pm EST. The metals didn’t move much… but, the miners sure did, and to the upside, at that! What does it mean? My best guess, before looking at the charts, would likely be short-covering.
Since they were all up, let’s start with those that rose on light volume: RGLD, CDE, GLD, SGDM, SLW, SILJ, SSRI, PVG, AG, FSM and NUGT.
There were gainers on average volume as well: HL, SLV breaking a 14-day straight down streak, GDX, PAAS and ABX.
This should be easy… volume must have been light. And, yes, the average volume for all 16 issues was off by 24% from the 50-day average of volume. Except for the metal’s price move, many of the miner’s price moves were big… but, the volume was not. Not at all. Typically, we would say that this was not the kind of day’s move that would announce the kick-off of a new rally. The usual view of such a day as Friday was that it included a good deal of short-covering, as traders were taking profits after the significant decline in prices had occurred.
Had a new, true rally been born, they much more commonly will take off in price like we saw on Friday, but would do so on typically much greater volume than average.
No need to get excited yet, unless we see any kind of follow-through to indicate that traders and investors want to accumulate serious quantities of shares. Prices will jump, but so will volume.
Here’s to your accumulation of real wealth!
Harold F Crowell