(Source: Daily Sentiment Index Data, Author’s Chart)
As shown in the chart above, bullish sentiment for silver has slid significantly from February levels, down from a reading of 90% bulls when a herd of investors was briefly convinced that WallStreetBets was going to corner the silver market. Given the Hunt Brothers’ lack of success in this same endeavor, it should have been quite obvious this wasn’t likely to work, and the price has retreated considerably since. The good news is that this 18% correction in SLV has taken a massive bite out of sentiment, with bullish sentiment falling 6500 basis points in 4 months, from 90% bulls to barely 20% bulls. While low readings on sentiment do not guarantee bottoms, they do create the conditions for bottoms to be formed, and we typically see buying support on any further weakness. This suggests that sentiment has finally tilted in favor of the bulls, and we have entered a low-risk buy zone for a starter position in silver.