Today's chart of the day focuses on the current bear market in Silver. Regular readers would remember the chart below, which tracks the current sell-off (which peaked in late April 2011) against all other major bear markets Silver has been through since 1960s.
Chart Of The Day: Silver has now completed four years of its downtrend
Let us make a few observations:
- The current bear market is four years old, which means it is the longest downtrend without a substantial rally since Silver officially floated on exchanges in the late 1960s.
- While the 1987 to 1993 bear market was longer, I would like to remind readers that the actual low was posted in early 1991.
- The current bear market is down 68% from its April 2011 high, which ranks it as the second worst downtrend (worst being the 1980-82 bursting of the bubble)
- Furthermore, there has only ever been one bear market where Gold sold off more then 50% and Silver sold off more then 70% (the 1980-82 precious metals crash).
While just about all investors have given up on Gold and Silver, contrary investors should be wondering how much longer and/or lower do these assets need to go, before the final low is in place? That is the million dollar question!
Disclosure: My largest portfolio position is Silver, with an entry that is approximately 60% below its April 2011 highs. This means that currently it is under water, but I will continue to accumulate this asset by averaging down. I have also shorted Silver successfully twice during the current bear market. First in August and September 2011, then again recently during July 2014.