Silver’s 2nd Most Oversold Reading in a Decade But Parallels of 2008 Still Suggest Caution | Chris Puplava

But Parallels of 2008 Still Suggest Caution

Silver (SLV) just completed its second major correction this year after its parabolic rise and peak in April. The second decline that occurred over the last month has led silver to shedding nearly half its value. The decline over the last six months has pushed our silver indicator to the second most oversold value in a decade. Is this a major buying opportunity or are investors now catching a falling knife? The answer to that question hinges on what the dollar (UUP) does over the next several weeks.

Silver Deeply Oversold

Given the sharp selloff in silver over the last few months it’s not surprising to see silver in oversold territory, but how oversold is it relative to prior corrections? To show how extreme silver’s recent oversold condition is, our silver risk indicator below shows that silver is at its second most oversold reading in the past decade, with 2008 the only exception. Quite the whipsaw after our indicator showed the most overbought condition in silver in April, with our silver indicator exceeding the 2004, 2006, and 2008 peaks, and then to see the second most oversold reading six months later. Given the deeply oversold condition silver finds itself in, is now a good time to take advantage of the recent price decline? Yes and no.

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via Silver’s 2nd Most Oversold Reading in a Decade But Parallels of 2008 Still Suggest Caution | Chris Puplava | FINANCIAL SENSE.

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