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Investing in silver bullion has pros and cons, and what’s right for one investor may not work for another.

Interest in the silver market tends to flourish whenever the silver price increases, with investors beginning to wonder if silver is a good investment and it is the right time to add physical silver to their investment portfolios.

While silver can be volatile, the precious metal is also seen as a safe-haven asset, similar to its sister metal gold. Safe-haven investments can offer protection in times of uncertainty, and with tensions running high, they could be a good choice for those looking to preserve their wealth in difficult times.

With those factors in mind, let’s look at the pros and cons of buying silver bullion.

What are the pros of investing in silver bullion?

Silver can offer protection

Silver bullion is often considered a good safe-haven asset. As mentioned, investors often flock to precious metals in times of turmoil, politically and economically. For example, physical silver and gold have both performed strongly in recent years against a background of geopolitical instability and high inflation.

Silver bullion is a tangible asset

While cash, mining stocks, bonds and other financial products are accepted forms of wealth, they are essentially still digital promissory notes. For that reason, they are all vulnerable to depreciation due to actions like printing money. A troy ounce of silver bullion, on the other hand, is a finite tangible asset. That means that, although it is vulnerable to market fluctuations like other commodities, physical silver isn’t likely to completely crash because of its inherent and real value. Market participants can buy bullion in different forms, such as silver coins or silver jewelry, or they can buy silver bullion bars.

Silver’s cheaper and more flexible than gold

Compared to gold bullion, silver is significantly cheaper, which makes it more accessible for investors looking for an affordable entrance to the precious metals market. This can make it easier for investors to build up a portfolio over time.

Another benefit is that investors who need to convert their precious metals to currency will have an easier time selling a portion of their silver portfolio than those looking to sell part of their gold. Just as a US$100 bill can be a challenge to break at the store, divvying up an ounce of gold bullion can be a challenge. As a result, silver bullion is more practical and versatile, particularly for everyday investors who need flexibility in their investments.

Silver offers higher returns than gold

Silver tends to move in tandem with gold: when the price of gold rises, so too does the price of silver. Because the white metal is currently worth around 1/100th the price of gold, buying silver bullion is affordable and stands to see a much bigger percentage gain if the silver price goes up. In fact, silver has outperformed the gold price in bull markets. It’s possible for an investor to hedge their bets with silver bullion in their investment portfolio.

History is on silver’s side

Silver and gold have been used as legal tender for thousands of years, and that lineage lends them a sense of stability. Many buyers find comfort in knowing that silver has been recognized for its value throughout a great deal of mankind’s history, and so there’s an expectation that it will endure while a fiat currency may fall to the wayside. When individuals invest in physical silver, there is a reassurance that the metal has value that will continue to persist. Additionally, its increasing use as an industrial metal in the energy transition has improved the metals fundamentals even further.

What are the cons of investing in silver bullion?

Danger of theft

Unlike most other investments, such as stocks, holding silver bullion can leave investors vulnerable to theft. And of course, the more physical assets, including silver jewelry, that reside within your home, the more at risk you are for losing significantly if a burglary takes place. It’s possible to secure your assets from looting by using a safety deposit box in a bank or a safe box in your home, but this will incur additional costs.

Weaker return on investment

Silver may not perform as well as other investments, such as real estate or even other metals. Mining stocks, especially silver stocks that pay dividends, may also be a better option than silver bullion for some investors. Royalty and streaming companies are another option for those interested in investing in silver, as are exchange-traded funds and silver futures.

High silver demand leads to higher premiums

When investors try to buy any bullion product, such as an American silver ounce coin known as a silver eagle, they quickly find out that the physical silver price is generally higher than the silver spot price due to premiums used by sellers. What’s more, if demand is high, premiums can go up fast, making the purchase of physical silver bullion more expensive and a less attractive investment.

Bullion lacks quick liquidity

Silver bullion coins are not legal tender, meaning they can’t be used for every day purchases. Since the metal is usually used as an investment, this isn’t often an issue. However, it does mean that if silver needs to be sold in a hurry to cover expenses, investors will need to find a buyer. If you can’t access a bullion dealer and are in a jam, pawn shops and jewelers are an option, but they won’t necessarily pay well.

How to add physical silver to your portfolio?

How to buy silver digitally?

Larisa Sprott: Gold, Silver Early in Cycle, Smart Money Buying Now

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

The Trump administration announced a rebrand of the US Artificial Intelligence (AI) Safety Institute, stripping the word “safety” from the organization’s title and mission.

The institute, once tasked with developing standards to ensure AI model transparency, robustness and reliability, will now be known as the Center for AI Standards and Innovation (CAISI). According to the announcement, its focus will be on enhancing US competitiveness and guarding against foreign threats, not constraining the industry with regulations.

The decision, announced on Tuesday (June 3) by US Secretary of Commerce Howard Lutnick, marks a sharp departure from the Biden-era posture on AI governance.

‘For far too long, censorship and regulations have been used under the guise of national security. Innovators will no longer be limited by these standards,” Lutnick said in a statement.

“CAISI will evaluate and enhance US innovation of these rapidly developing commercial AI systems while ensuring they remain secure to our national security standards.”

Established in November 2023 under President Joe Biden’s executive order on AI, the original AI Safety Institute was housed within the National Institute of Standards and Technology (NIST). It aimed to assess AI risks, publish safety benchmarks and convene stakeholders in a consortium focused on responsible AI development.

But with the Trump administration’s return to the White House, the emphasis has shifted.

Instead of curbing AI risks through regulation and safety protocols, the renamed CAISI will now prioritize “pro-innovation” objectives, including the evaluation of foreign AI threats, mitigation of potential backdoors and malware in adversarial models and avoidance of what the administration sees as regulatory overreach from foreign governments.

According to the commerce department, CAISI’s primary tasks will include collaborating with NIST laboratories to help the private sector develop voluntary standards that enhance the security of AI systems, particularly in areas like cybersecurity, biosecurity and the misuse of chemical technologies. The center will also establish voluntary agreements with AI developers and evaluators, and lead unclassified evaluations of AI capabilities that may pose national security risks.

In addition to those directives, CAISI will lead comprehensive assessments of both domestic and foreign AI systems, focusing on how adversary technologies are being adopted and used, and identifying any vulnerabilities, such as backdoors or covert malicious behavior, that could pose security threats.

The center is also expected to work closely with the Department of Defense, the Department of Energy, the Department of Homeland Security, the Office of Science and Technology Policy, and the intelligence community.

CAISI will remain housed within NIST and will continue to work with NIST’s internal organizations, including the Information Technology Laboratory and the Bureau of Industry and Security.

Rise of foreign AI spurs national security concerns

The reformation of the institute reflects Trump’s broader AI strategy: loosen domestic oversight while doubling down on global AI dominance. Within his first week back in office, Trump signed an executive order revoking Biden’s prior directives on AI governance and removed his AI policy documents from the White House website.

That same week, he announced the US$500 billion Stargate initiative — a massive public-private partnership involving OpenAI, Oracle and SoftBank Group (OTC Pink:SOBKY,TSE:9984) that is intended to make the US the global leader in AI.

The Trump administration’s pivot has been partly catalyzed by growing concerns over foreign AI competition, particularly from China. In January, Chinese tech firm DeepSeek unveiled a powerful AI assistant app, raising alarms in Washington due to its technical sophistication and uncertain security architecture.

Trump called the app a ‘wake-up call,” and lawmakers quickly moved to introduce legislation banning DeepSeek from all government devices. The Navy also issued internal guidance advising its personnel not to use the app “in any capacity.”

Signs of an impending transformation had emerged earlier in the year.

Reuters reported in February that no one from the original AI Safety Institute attended the high-profile AI summit in Paris that month, despite Vice President JD Vance representing the US delegation.

Trump’s One Big Beautiful Bill reshaping US AI governance

Trump’s massive One Big Beautiful Bill, which includes much of the aforementioned legislation, is poised to dramatically reshape the landscape of AI regulation in the US. The bill introduces a 10 year moratorium on state-level AI laws, effectively centralizing regulatory authority at the federal level.

This move aims to eliminate the patchwork of state regulations, which the administration claims would foster a uniform national framework to bolster American competitiveness in the global AI arena.

The bill’s provision to preempt state AI regulations has sparked significant controversy.

A coalition of 260 bipartisan state lawmakers from all 50 states has urged to remove this clause, arguing that it undermines state autonomy and hampers the ability to address local AI-related concerns. Critics also warn that the moratorium could delay necessary protections, potentially endangering innovation, transparency and public trust. They argue that it may isolate the US from global AI norms and reinforce monopolies within the industry.

Despite the backlash, proponents within the Trump administration assert that the bill is essential for maintaining US leadership in AI. The One Big Beautiful Bill is currently being debated in the US Senate.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com
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Democrats are moving to embrace former Department of Government Efficiency leader Elon Musk as he publicly spats with President Donald Trump, despite many party voters and lawmakers railing against Musk for months as a ‘fascist’ or ‘dictator’ for taking a hatchet to the federal government’s overspending and fraud within the Trump administration.

‘If Biden had a big supporter criticize him, Trump would have hugged him the next day,’ Democrat California Rep. Ro Khanna posted to X on Thursday of Musk’s criticisms of the ‘big, beautiful bill.’ ‘When we refused to meet with @RobertKennedyJr, Trump embraced him & won. We can be the party of sanctimonious lectures, or the party of FDR that knows how to win & build a progressive majority.’

Khanna told Politico on Wednesday that Democrats should ‘ultimately be trying to convince [Musk] that the Democratic Party has more of the values that he agrees with.’

‘A commitment to science funding, a commitment to clean technology, a commitment to seeing international students like him,’ he added. 

Democrat New York Rep. Ritchie Torres told the outlet on Wednesday, ‘I’m a believer in redemption, and he is telling the truth about the legislation.’ 

Torres said Musk has ‘done an enormous amount of damage’ and ‘there are Democrats who see his decimation of the federal workforce and the federal government as an unforgivable sin.’

‘Couldn’t agree with Elon more: kill the bill,’ Jon Favreau, who served as former director of speech writing for former President Barack Obama, posted to X in response to Musk calling on lawmakers to ‘kill’ the legislation.

Musk is in the midst of publicly trading barbs with Trump over the One Big Beautiful Bill Act, which is sweeping legislation currently making its way through Congress and aims to fund the president’s agenda. 

‘I’m sorry, but I just can’t stand it anymore,’ Musk posted to X on Tuesday. ‘This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.’ 

In addition to Democrats who don’t support the bill, Musk has also found himself aligned with members of the House Freedom Caucus, which is considered the most conservative voting bloc within the lower chamber, as well as staunch fiscal conservatives in the Senate, such as Republicans Kentucky Sen. Rand Paul and Wisconsin Sen. Ron. Johnson, who have publicly rebuked the legislation. 

Some Democrats posting messages favorable of Musk’s comments on the ‘big, beautiful bill’ come after many left-wing voters and lawmakers, as well as federal employees, slammed Musk for months as an unelected billionaire who was helping shape White House policy. Many also took issue with Musk on inauguration day for delivering what dozens of media outlets described as a ‘Nazi-style salute’ to Trump supporters. 

‘If you’re cool and want to defend the ‘Sieg Heils’ and the Nazi salutes … whatever you want to do, that’s on you,’ Democrat New York Rep. Alexandria Ocasio-Coretz said in January following the gesture. ‘I’m on the opposite side of that. I’m not with the Nazis.’

‘I never imagined we would see the day when what appears to be a Heil Hitler salute would be made behind the Presidential seal,’ New York Rep. Jerry Nadler tweeted in January. ‘This abhorrent gesture has no place in our society and belongs in the darkest chapters of human history. I urge all of my colleagues to unite in condemning this hateful gesture for what it is: antisemitism.’

‘He’s incompetent. He’s a thief. He’s a Nazi. And people don’t trust him,’ former Democrat New York Rep. Jamaal Bowman said of Musk in March. 

‘He’s a Nazi nepo baby who breaks everything he touches,’ Massachusetts Democrat Rep. Ayanna Pressley said in February as Musk announced cuts to the federal government via DOGE. ‘And right now he’s locked himself in a room with grandpa’s Social Security check.’

Massachusetts Sen. Ed Markey referred to Musk as a ‘dictator’ at an anti-DOGE rally in February.

Trump responds to Musk: He was

Fiscal conservatives in Congress have spoken out against the One Big Beautiful Bill Act as one that will increase the U.S. debt ceiling by trillions, including Senate Republicans bucking support for the legislation after its passage in the House last month. 

‘I want the tax cuts to be permanent. But at the same time, I don’t want to raise the debt ceiling $5 trillion,’ Paul told CBS’ ‘Face the Nation’ on Sunday. ‘The GOP will own the debt once they vote for this.’

Trump has admonished the criticism from fiscally conservative Republicans, arguing that Paul, for example, was on the verge of siding with the ‘Radical Left Democrats’ and encouraging a 68% tax hike on Americans if he voted against the legislation. 

Musk, since stepping down from his DOGE role in May after his 130 predetermined days as a special government employee ended, ramped up his criticism of the bill on Wednesday, including encouraging lawmakers to ‘kill the bill.’

Trump says he is

On Thursday, Trump directly addressed Musk’s comments, saying in an Oval Office meeting with the chancellor of Germany that he was ‘disappointed’ by Musk’s attacks on the legislation and said he was unsure how their friendly relationship would fare through the criticisms. Trump added that Musk’s disapproval of the bill was allegedly tied to its cuts to electrical vehicle mandates. Musk is the CEO of electric vehicle company Tesla. 

‘I’m very disappointed because Elon knew the inner workings of this bill better than almost anybody sitting here, better than you people. He knew everything about it. He had no problem with it,’ Trump said Thursday. ‘All of a sudden, he had a problem. And he only developed the problem when he found out that we’re going to have to cut the EV mandate.’

‘Elon and I had a great relationship. I don’t know if we will anymore,’ Trump added.

The pair later launched attacks on one another on social media.

‘Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!’ Trump posted to X on Thursday. 

‘Such an obvious lie. So sad,’ Musk responded on X.


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House GOP lawmakers are accusing Elon Musk of going ‘too far’ after he suggested President Donald Trump was ‘in the Epstein files.’

‘Hopefully we never have to answer questions about tweets like that from Elon again,’ said Rep. Pat Fallon, R-Texas, calling Musk’s comments ‘not helpful.’

‘Elon crossed the line today,’ Rep. Chip Roy, R-Texas, told Fox News Digital,

Musk referenced late pedophile Jeffrey Epstein in relation to Trump Thursday as part of a larger tirade against the president and Republican leaders over their budget reconciliation bill.

The tech billionaire accused Republicans of adding to the national debt — currently nearing $37 trillion — with legislation they’ve called Trump’s ‘big, beautiful bill.’

‘Time to drop the really big bomb. [Trump] is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!’ Musk wrote on X. ‘Mark this post for the future. The truth will come out.’

Rep. Troy Nehls, R-Texas, said Musk had ‘gone too far.’

‘There’s just no need for this,’ Nehls said. ‘Those conversations should be taking place behind closed doors.’

Some Republicans argued that any damning information about Trump and Epstein would have already been revealed if it existed.

‘What I would say is, if Joe Biden had Donald Trump in the Epstein logs, there’s no question it would have come out during the campaign,’ Rep. Randy Fine, R-Fla., told Fox News Digital. ‘So, I don’t know what’s prompting it. I think it’s all unfortunate.’

Rep. Tim Burchett, R-Tenn., questioned why Musk would let his young son, nicknamed ‘X,’ around Trump if he believed he was closely associated with a pedophile.

‘The Biden administration would have put it out. There’s nobody that Democrats hate more than Donald J. Trump, and he’s handing them their lunch every day. So, I don’t put much faith into it,’ Burchett said.

‘Why would he let his kid hang out with the president if that was true? That just doesn’t make any sense. And now he’s calling for his impeachment. I mean, it’s just going off to the deep end.’

Rep. Anna Paulina Luna, R-Fla.,  who is leading a task force on declassifying federal investigations, including Epstein’s, told reporters she did not think Musk’s suggestion held water.

‘Speaking to Jeffrey Epstein, I will be very specific that I do believe that if President Trump was in the Epstein files, they would have released it during the primary, and they didn’t,’ Luna said.

‘So, the fact is, is that I do not believe that President Trump is in the Epstein files, the way that it’s being implied, but either which way, this is why we continue to push for transparency.’

Rep. Ralph Norman, R-S.C., however, stood apart in his answer in calling for more transparency into the Epstein files.

‘Facts will bear out whatever they will,’ Norman said. ‘The Epstein files are bound to come out, and let it come out. We ought to see it. America has a right to know, just like they do with the John F. Kennedy files, the Bobby Kennedy files.’

White House press secretary Karoline Leavitt attributed Musk’s tirade to Trump’s bill, which is focused on working- and middle-class tax relief and not benefiting Musk and his companies enough.

‘This is an unfortunate episode from Elon, who is unhappy with the One Big Beautiful Bill because it does not include the policies he wanted. The President is focused on passing this historic piece of legislation and making our country great again,’ Leavitt said.

Sen. Pete Ricketts, R-Neb., told Fox News Digital, ‘I could not tell you what Elon Musk’s motivations are, but I can tell you what we’re going to do, which is avoid a $4 trillion tax increase on the American people.

And while it’s well-known the two men were acquainted, a source familiar with the matter pointed out that Trump had kicked Epstein out of his Palm Beach Golf Club.

Trump had permanently banned Epstein from Mar-a-Lago for hitting on a teenage daughter of a club member, according to a book, ‘The Grifter’s Club.’ 

‘The administration itself released Epstein files with the President’s name included. This is not a new surprise Elon is uncovering. Everyone already knew this,’ the source said. ‘If Elon truly thought the President was more deeply involved with Epstein, why did he hang out with him for six months and say he ‘loves him as much as a straight man can love a straight man?”

Fox News Digital has also reached out to Musk for comment via his office at Tesla.


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Overshadowed by gold in recent months, silver claimed the spotlight on Thursday (June 5).

The white metal’s price rose as high as US$36.03 per ounce in early morning trading, a 13 year high, before retreating toward the US$35.50 mark as US markets began their sessions.

Recent economic and geopolitical events have raised analysts’ expectations of a September rate cut from the US Federal Reserve, helping to fuel safe-haven buying of silver and gold.

The central bank has held its benchmark rate at 4.25 to 4.5 percent since November 2024.

Silver price, May 29 to June 5, 2025.

Silver price, May 29 to June 5, 2025.

CME Group’s (NASDAQ:CME) FedWatch tool shows half of market respondents predict a 0.25 percent cut at the Fed’s September meeting, while the other half is split on the Fed holding the line and a deeper 0.5 percent cut.

Silver’s spike also comes after a phone call between US President Donald Trump and Russian President Vladimir Putin. Following the discussion, Trump said a near-term ceasefire between Russia and Ukraine is unlikely, noting that Putin has vowed to respond to recent attacks by Ukraine that destroyed more than 40 nuclear-capable aircraft.

On the economic data front, the US released its weekly unemployment insurance report on Thursday. It shows that the advance figure for seasonally adjusted initial claims was 247,000 for the week ended on May 31. The four week average has been pushed to 1.9 million, the highest level since November 27, 2021.

The US Bureau of Labor Statistics reported more data to suggest a slumping US economy in a Thursday report focused on Q1. In its release, the bureau said that nonfarm labor productivity decreased 1.5 percent in the first quarter of the year as output decreased 0.2 percent and hours worked increased 1.3 percent.

The labor news comes as the Trump administration ratcheted up tariffs on steel and aluminum products to 50 percent this week, raising the possibility of a deepening trade war, and putting greater pressure on the global economy.

Elsewhere, gold and equity markets weren’t faring as well on Thursday.

Gold was off by 0.5 percent in morning trading, falling to US$3,353.66 per ounce.

The metal has surged more than 25 percent this year, setting a slew of new price records, and has continued to trade in elevated territory, fueled by the same conditions as silver’s recent run.

The S&P 500 (INDEXSP: INX) was flat, recording a 0.14 percent decline to 5,961. The Nasdaq-100 (INDEXNASDAQ: NDX) was the sole gainer in morning trading, rising 0.24 percent to 21,776, and the Dow Jones Industrial Average (INDEXDJX: .DJI) was unchanged at 42,422.

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

The global auto sector is under strain as China’s tightened export controls on rare earths begin to ripple across supply chains, shutting down parts production and forcing carmakers to brace for deeper disruptions.

The export curbs, imposed in April in response to US tariffs under President Donald Trump, are now triggering operational slowdowns and halts from Europe to Japan, with suppliers and automakers sounding the alarm.

The European Association of Automotive Suppliers (CLEPA) confirmed this week that several supplier plants in the region have already ceased production due to depleted inventories of rare earths and related magnets.

These materials are critical to both electric and internal combustion engine vehicles, and CLEPA has warned that more shutdowns are imminent if the situation remains unresolved. The group notes that while hundreds of export license applications have been submitted to Chinese authorities, only about a quarter have been approved so far.

“With a deeply intertwined global supply chain, China’s export restrictions are already shutting down production in Europe’s supplier sector,” said CLEPA Secretary General Benjamin Krieger in a statement.

The German Association of the Automotive Industry (VDA), which represents the country’s powerful car manufacturing lobby, echoed this concern in comments made this week.

“The Chinese export restrictions on rare earths are a serious challenge for the security of supply, and not just in the automotive supply chains,” VDA President Hildegard Müller told CNBC in an email.

“If the situation does not change quickly, production delays and even production stoppages can no longer be ruled out.”

China’s commerce ministry began implementing stricter export controls in early April, requiring suppliers of rare earth elements and high-performance magnets to obtain special licenses for overseas shipments.

The process has proven slow, opaque and burdensome, with applications running into the hundreds of pages. According to customs data, exports of rare earth magnets from China halved in April.

The policy has escalated a broader trade conflict between the world’s two largest economies.

Trump imposed tariffs as high as 145 percent on Chinese imports earlier this year in an attempt to rebalance trade flows and revive domestic manufacturing. After initial market backlash, some of those tariffs were scaled back, but China’s retaliatory move to weaponize its dominance of the critical minerals supply chain has reopened the standoff.

“US-based automotive production may have to halt production now because of shortages caused by China of high-performance permanent rare earth magnets,” warned Mark A. Smith, CEO of NioCorp Developments (NASDAQ:NB).

Smith said China is the world’s only source of processed heavy rare earths and holds complete leverage in this domain.

“The only real solution is to accelerate production in the US of these strategic materials and reduce our current dependence on China,” he added in a statement issued by his company this week.

The White House has not publicly commented on the situation, though expectations are high that Trump and Chinese President Xi Jinping will address the export curbs in an upcoming conversation.

In a social media post on Wednesday (June 4), Trump called Xi “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH,” reflecting the fragile state of ongoing trade negotiations.

Analysts have long warned that overreliance on China for critical minerals — including the rare earths needed in wind turbines, electric vehicles, semiconductors and military systems — poses both economic and security risks.

Currently, China accounts for nearly 90 percent of global rare earths refining and 60 percent of rare earths mining.

As governments and companies scramble to shore up supply chains, the rare earths crisis has become emblematic of the vulnerabilities built into the green energy transition — and the geopolitical risks of concentrated supply.

With no immediate end in sight, the global auto sector may be facing the early stages of a protracted disruption.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

I’m a huge fan of using platforms like StockCharts to help make my investment process more efficient and more effective.  The StockCharts scan engine helps me identify stocks that are demonstrating constructive technical configuration based on the shape and relationship of multiple moving averages.

Today I’ll share with you one of my favorite scans, called “Moving Averages in Correct Order”, and walk through three charts that highlight the benefits of identifying charts in primary uptrend phases.

Primary Uptrends Can Be Defined By Moving Averages

This scan, which StockCharts members can access in the Sample Scan Library, basically looks for three criteria to be met for any chart:

  1. 20-day EMA > 50-day SMA
  2. 50-day SMA > 100-day SMA
  3. 100-day SMA > 200-day SMA

The general approach here is to find charts where the short-term moving averages are above their longer-term counterparts.  By making multiple comparisons, we can ensure a more consistent uptrend phase based on the recent price action.  

Let’s review two charts that I feel are representative of the stocks that will tend to come up using this scanning approach.

You’ll Probably Find Two Types of Charts in the Results

The most common result will be a chart that is in a long-term primary uptrend, making consistently higher highs and higher lows.  Netflix (NFLX) is a great example of this sort of “long and strong” price action.

The four moving averages have remained in the proper order as described above for most of the last 12 months.  After NFLX pulled back to its April low, a bounce back above the March swing high moved the 21-day exponential moving average back above the 50-day simple moving average.  From that breakout point, the stock has continued to push to new all-time highs into early June.

One thing I love about this scan is it helps me confirm which stocks are in persistent uptrends, because those are the types of charts that I generally want to be following as they trend higher.  But sometimes, a pullback chart will come up in the scan as well.  Here’s TJX, which has recently pulled back after achieving a new all-time high in May.

We can see that the moving averages returned to the proper order in early April after rotating higher off a major low in mid-March.  From that point, TJX had a false breakout in mid-April before finally completing the move to a new high in early May.  TJX subsequently gapped lower after an earnings miss, and the stock has now pulled back to an ascending 50-day moving average.

The TJX chart reminds me of three benefits of following moving averages over time.  First, we can look at the slope of an individual moving average to evaluate the shape of the trend on a specific time frame.  Second, we can compare multiple moving averages to validate the trend on multiple time frames.  Finally, we can use moving averages as potential support and resistance levels in the event of a pullback.

With TJX testing an ascending 50-day moving average this week, I’m inclined to treat this chart as “innocent until proven guilty” as long as it remains above this key trend barometer.  But if and when the 50-day moving average is violated, and if the moving averages are no longer in the proper order, then I would need to reevaluate a long position.

Why the Transition to Proper Order is So Important

This final example shows how the transition between moving average configurations can prove so valuable in understanding trend transitions.  Here’s a daily chart of VeriSign (VRSN) showing how the relationship between the moving averages can help us better label the different trend phases.

On the left third of the chart, we can see the moving averages mostly in a bearish order, confirming a distribution phase for the stock.  Then in June 2024, the moving averages change to where there’s no real clean definition of the trend.  This represents a consolidation phase, where buyers and sellers are essentially in agreement.

Finally, we can see that when the moving averages finally achieve a bullish configuration, VRSN is now in an accumulation phase of higher highs and higher lows.  And as long as those moving averages remain in the proper order, the uptrend phase is confirmed.

The goal with this moving average scan is to help us identify charts that are just rotating into the accumulation phase.  It’s also designed to encourage us to stick with winning trends as long as the price action confirms the uptrend.  And if and when the moving average configuration changes, then our approach should probably change as well!


RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

marketmisbehavior.com

https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.