Silver Monthly Chart 1980-2019 Review

Many analysts and wave analysts are very bullish on gold and silver as they think it offers some protection or safe harbor.  Running into an asset class is an emotional decision, not a logic one.

Emotional runs rarely last that long and as we can see if we look back in history, how violent silver moves have been. Of course, 20-20 hindsight vision is all fine and dandy, but if we don’t look back further than 2011, it is hard to imagine how violent silver prices have moved in the past. It’s the nature of the beast as commodities all follow the diagonal wave patterns, not those pretty wave patterns that we have in the DJIA or SP500.  Diagonal wave structures break all the rules as overlapping is more like the rule than the exception.

I remember the days when the Hunt brothers were trying to corner the silver market and since they tried to do this near a 30-year 1980 record high it was doomed to fail.

If we look at the spikes in 1980 and 2011, what followed was a huge bear market. Commodities are just big zigzags that are linked together and silver is no exception. The 30-year cycle with a ± 1-year frequency to it can be tracked back by counting backward by 30 years each time. The 120, 90, 60-year cycles all contain the 30-year cycles as well. 2041 will be a Supercycle degree peak but that will not happen until the bear market since the 2011 peak is finished.

Last week the government bureaucrats went back to work and actually produced new COT reports dated February 1, 2011. During this downtime, the commercials didn’t get excited and jump on the bullish silver bandwagon but they turned bearish and increased their net short silver positions. The speculators did the exact opposite as they are still chasing the silver bull.  This gives me confidence that the bull market in silver can turn on a dime, and break a new record, below the $13-$14 price level.  The recent bullish phase in silver is just barely 3 months old and is lagging gold by a long shot.

Commercials added 2960 short positions and removed 1433 long positions. Combine the two and I see more bearish moves to come, than bullish moves. It’s the non-commercial hedgers that always get in a trap, not the commercials who work inside the industry.

Gold commercials made a big bearish move, which I will post and edit in my recent gold post.

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