Silver: Mass Pessimism and Potential Breakout Point to Upside

OANDA:XAGUSD   Silver / U.S. Dollar
569 1
Based on COT data, this is THE most pessimistic speculators have been on silver in the last decade. Even more so than during major multi-year crash prior to 2016. Speculators are amassing short positions, which they have not done in more than a decade, and the price is no longer dropping. To me, that is a contrarian bullish sign.

COT positions are not a timing indicator.
The price could hover here or even drop a bit more before rallying.
Typically, when things get this pessimistic, once a rally starts it typically lasts for at least a few weeks.

While the price could be entering a major up wave if it breaks out of the current patterns, I will deal with that as it unfolds.
Right now I am primarily concerned with the evidence pointing to a short-term pop with the next weeks.

For a longer-term major upwave to unfold I would also want to see SIL and GDX start to rally aggressively, as well as gold . If GDX and SIL (the miners) don't join the party, then the rally is likely to be short lived.

I am long.
Good to see you back here Cory! Cheers
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