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(Source: Daily Sentiment Index Data, Author’s Chart)
Since the second week of July, we’ve had all of the conditions in place for a short-term bottom in the price of silver, including depressed sentiment, as shown above. Typically, when bullish sentiment for silver has declined below 30%, we have seen violent rallies in the price of silver, with the metal returning 15% or more over the following three months. However, the most recent decline in bullish sentiment has been met with more selling, with silver unable to hold onto its 200-day moving average and continuing to make new lows below its recent oversold signal.
