Silver’s Bear is 4 Years Old

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Today’s chart of the day focuses on the current bear market in Silver. Regular readers of the blog 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

Silver Bear Markets 

Source: Short Side of Long

 

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 the readers that the actual low was posted in early 1991
  • The current bear market is down 68% from its April 2011, 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 metal 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 time was in August & September 2011 and then once again recently during July 2014.