According to Ned Davis Research, silver is overbought and the current bull market is showing signs of a bubble. The metal soared more than 10% on Tuesday, rebounding from its worst day in four years on Monday to close at an all-time high of $77.92. Silver has risen more than 140% this year and is on pace to post its best annual performance since 1979. The metal fell more than 7% to $71.98 by 9:28 a.m. ET on Wednesday. @SI.1 YTD Mountain Silver Year-to-date Trends “Silver appears overbought by almost every measure,” commodity strategist Matt Bauer told clients in a note Wednesday. “December’s sharp rally pushed trend and momentum indicators to historically rare levels,” Bauer said, adding that the white metal has gone 833 days without a 20% correction. The strategist said the growth is approaching a 45-year record. Three-week inflows into the ProShares Ultra Silver ETF (AGQ) have surged, indicating increased speculation and retail participation, Bauer said. But the strategist said the metal’s year-end bull run has yet to “fall into any meaningful over-optimism.” “This is an aging bull market as measured by returns and duration,” Bauer said. “However, with positioning and sentiment below previous extremes, a slight correction could pave the way for further upside.”
