SILJ Rally in 2016

In this chart I examine the sharp 2016 rally in miners, specifically the SILJ etf, so that we might know what to expect in a similar bull market move. The blue arrows are the rallies, measured as how far SILJ rose above it’s 200 day MA, while the red arrows mark the corrections that took place after the sharp moves higher. It seems that in 2016, SILJ would rally 105%-120%, before selling set in and it dropped between 20%-25%. Also of note, the worst corrections occurred near the end of that bull run, so maybe that will be the tipoff this time around as well. Notice the red correction zone that lasted about the entire month of May, and brought prices down about 24%, but only after SILJ rallied 120% above it’s 200 day MA, maybe something else we should be prepared for in this new bull market?

With SILJ currently sitting just 22% above its 200 day MA, the takeaway is that there is still lots of upside potential in this rally. Also notice how many times SILJ stretched over 100% above the 200 day MA, over the course of the 8 month bull run. I would encourage people not to take profits too soon, the miners rally so sharply at times that it’s almost impossible to get back in!