Steal From The Rich, Give To The Poor...

The gang on the social media platform Reddit have had some last week or so - running up the shares of down-on-the-heels companies like GameStop and AMC Entertainment to force short sellers to cover their positions. It's been framed as the little guy rebelling against the big bad wolves.

And now they seem to have moved on to silver. They have been doing so in a somewhat unconventional way - buying up ETFs and forcing them to buy silver futures, forcing banks and others to cover short positions that were likely used for hedging purposes. Silver was up about 8.5% today and is up almost 15% over the past week.

But here is where the big boys might have an interesting trade after all. As you can see from the Excalibur Pro correlation tool (and graph), gold and silver are typically very highly correlated. When looking at the 5-day rolling average in a one-month window, the most recent data shows a very high correlation value of .91. But the most recent 5-day average (from Jan. 29) has fallen to 0.66. This should provide a good opportunity for a correlation trader because that correlation value will certainly rise again.