Napoleon Complex No More

It is quite easy these days on Wall Street to fall victim to sensory overload, be it the crypto craze and COIN IPO, pandemic fallout and debate over which industries come back and when, The Fed, rates, our political system at-large, among many other issues. Mind you, these are all relevant from a concerned citizen's perspective. 

But as market players, I still maintain it is quite easy to lose the forest for the trees. Just this morning on a cable news (non-financial) morning program, they interviewed the CEO of a closely-held furniture company in North Carolina who said their orders were at all-time highs but their supplied were on backorder due to petroleum-based issues causing a delay. Despite the overhang of the pandemic around the world, I suspect these bullish forces will continue to keep a strong bid underneath both crude and the still-underowned energy stocks. 

But as crude and materials pause this morning, let us not forget about the precious metals and miners. While I understand fully (believe me) just how frustrating the sector has been since last summer, we must not lose sight of the bigger picture. Specifically, while gold and many larger cap gold miners have been dripping lower for quarters on end, the small cap silver miners have been exuding relative strength and forming a massive, sideways base functioning as a potential "runaway" for bullish takeoff. 

The reason why I continue to harp on this divergence, with smaller silver miners like AG CDE EXK HL flashing much better overall charts than larger cap gold miners and indeed gold itself, is due to the high beta nature of small cap silver miners--If things were truly so dire for metals and miners, I suspect the small cap silver players would actually be leading the sector lower, not the opposite. As one of our Members noted this week, the SILJ ETF, below on its zoomed-out daily chart flashing that runway base, illustrates this point. 

And this morning's strength out of the gate as rates back down and the Dollar says limp gives the sector yet another shot at an imminent breakout after a tedious basing process.