The price of silver (SLV), has fallen for 9 months, but it is showing some signs of life. The fundamentals are still positive, despite low inflation and loose monetary policies. Taylor Dart explains why you should consider buying.It’s been a torturous 9-month stretch for investors in the silver (SLV), but periods of significant underperformance often set up the conditions for violent reversals, and this is what the bulls are finally enjoying as we begin Q4. While the S&P-500 (SPY) is up 3% for the month, silver has gained 6%, and the Silver Miners Index (SIL) is up 11%, with leaders like GoGold Resources (GLGDF) sitting just shy of new 52-week highs. A 10% gain in ten days or less is usually a sign to profit from weakness. With silver sentiment at its lowest level in many years, it is not the right time to grab profits. My view is that we may be on the cusp of a multimonth-long rally in silver which could lead to significant upside for some of the most prominent names in the industry. Let’s take a closer look below:

(Source: Daily Sentiment Index Data, Author’s Chart)

The chart below shows that bullish sentiment for Silver fell more than 3 weeks to the level of 25% in September. This suggests there were at least three bears per bull. The reading for bullish sentiment dropped to 10% last week. It denotes that nine of the bearish market participants were reading this reading. Extreme readings can often be found at the tail end bear markets. Although nothing can be guaranteed, prolonged periods of pessimism usually precede multi-month rallies in silver prices that exceed 20%. Any pullbacks provide buying opportunities. While some investors might want to turn their profits into strength after the dip, I think the top silver miners will be moving much higher over the next six-months. Because silver has not yet received a sell signal and January is the most likely time we will see a silver sell signal based upon how weak the market readings over the past nine month. This is to be recalled that the last bearish market signal was September 2018. Silver gained 22% in the 12 months following which the Silver Miners Index experienced an impressive 40% rally.

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