Silver ETF Trend Remains Bullish

The short trade in silver using the double short silver etf - ZSL only netted $130 before the silver market found support. This market remains incredibly strong and can't even go through an overdue correction. After watching the action unfold last week I sold ZSL and purchased the silver mining etf - SIL which is the Global X Silver Miners.

The precious metals miners have been outperforming the metals since the rally began in August. During the credit crunch the miners fell much harder than metal prices so they still remain at a substantial discount to the metals on a historical basis. The following chart shows the large cap miners represented by GDX and you can see they have not made up the gap that was created during the decline in 2008. SIL didn't start trading until after the crash so that's why I used GDX for the illustration.