What Is Silver Telling Us?

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The parabolic move in silver rivals the insanity of Chipotle Mexican Grill, Priceline, and AutoZone. The difference, of course, is that these three companies pretty much didn't exist ten years ago, whereas silver has been with us since – – well – – way longer than any living thing.

The last time silver went bananas like this during the past several decades was in 1979 and 1980. Take a look:

Picture 2

There are a couple of things worth noting. One, once the breakout occurred, silver had a long way to go – – – a move similar to the above would put silver north of $100 per ounce. Second, once the move exhausted itself, the collapse was just as sudden.

Ever since following the wise suggestion of selling my 1000 ounce silver brick, I've had a rather distorted view of silver, but by and large I avoid it like the plague. I'm not sure what silver is trying to tell us, but if God popped down for a moment to tell me it would be trading in the triple digits before it was all over, I wouldn't be that surprised.

If I owned silver, I'd be inclined to hang on. With no position, I shall simply remain a very interested observer.

I'm going to go look at non-silver charts now. See you on Tuesday morning.