Is Silver Rally Real of Just a Tease?

Silver seems to be exceptionally good at taking as few people along for the ride as it can. This can be frustrating for silver investors, but is great for the health of the long-term bull market in silver. The only way bull markets sustain themselves over the long term is to rebalance sentiment along the way, to prevent overwhelming bullishness from extinguishing the long-term rally.

Silver bucks investors off its bull run by trading in the following three ways: First, it has long and flat consolidations that shake off investor confidence and eventually cause them to bailout of their positions, often at the wrong time. Second, when it does rally, it does so in a non-stop runaway-train manner, right from the start to finish into a spike high. Third, once the spike high is over, silver immediately has a big correction, temporarily wiping out a big portion of the previous gains.

Although silver recently had a down month in January, it has recovered to a new high so far in February. This is a good sign that silver could be in rally mode still, and not ready for another long multi-month consolidation. Whatever the future holds for silver, it will do its best to take as few people with it as it can.

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