This post was originally published on this site
(Source: TC2000.com)
Beginning with the sentiment picture, we have to go back more than three years to see a similar level of pessimism as we are seeing currently, with the long-term moving average for silver diving off a cliff and currently sitting near 20% bulls. This is a massive sea change from where sentiment sat just over nine months ago during a poorly orchestrated silver squeeze attempt when bullish sentiment sat near 80% bulls. This means that we have transitioned from a market with four bullish market participants for every one bearish market participant to a market with four bearish market participants for every one that’s bullish. When everyone is a bull, and the sky is the limit for an asset class, the asset class typically corrects sharply, given that everyone is bullish and there’s no one left to buy. Conversely, now that the majority, there is almost no one interested in buying, with significant firepower if prices begin to head higher and investors decide they want to build up exposure.
