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Forget Silver, This Trend Has Way More Gas Left…
Forget Silver, This Trend Has Way More Gas Left in the Tank
BY LUCAS DOWNEY, EDITOR, TRADESMITH’S ALPHA SIGNALS
2026 is off to a wild start.
And really, anytime the calendars reset in January, money managers are bound to deploy capital into new areas.
Then, for those of us on the sidelines watching the parade of new winners drive by, the FOMO can get pretty intense.
But there’s a catch:
Big momentum thrusts are bullish for certain asset classes and bearish for others.
This is why it’s crucial to study history and make sure your ideas are backed by evidence before pulling the trigger.
Today we’ll be dissecting one of the hottest trends in recent months – the epic rise in silver prices.
If you benefitted from that breathtaking rally, congratulations. Now my latest data-driven signal study suggests you’ll want to take profits.
As you’ll see, the odds favor a healthy pullback from here.
On the flipside, I’ll show you another asset that’s surging but is worth hopping on the bandwagon in 2026.
Because if past is prologue, we could be staring at double-digit gains this year for the group.
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Gold has hit all-time highs, breaking $3,600 an ounce – but history shows it could be on the verge of its biggest bull run in over half a century… triggered by a likely major event, eerily similar to what happened in the 1970s. (It’s NOT inflation or anything you’re likely expecting.) And Stansberry Senior Partner Dr. David Eifrig believes you MUST own shares of his No.1 gold stock. He says it’s likely better than any miner, explorer, or exchange-traded fund on Earth. It’s the centerpiece of his full plan for this brutal market, with extraordinary upside potential. Click here for full details on this developing gold story.
First, Let’s Unpack the Epic Rise in Silver Prices
Precious metals have stunned the crowd in 2025… especially silver.
The SLV ETF has risen an incredible 159% the last year. And much of the lift came recently.
But what stuck out most to me is what happened to its Relative Strength Index (RSI).
SLV is now amazingly overbought… the most it has been in five years.
Even the much less feverish reading of 50 seen back in October was fairly high for silver, as you can see on the one-year chart below. Suddenly, by Dec. 26, the RSI climbed to 86:
You may notice from this smaller one-year window that SLV doesn’t hang in the upper 80 zone for long.
Turns out 20 years of data echoes that sentiment.
I went back through history and found all daily instances where SLV recorded RSI readings of 85 and higher.
Prior to December, this level of overbought has only occurred nine times.
And what happened next will have you fighting the urge to buy silver at today’s levels.
Since 2006, whenever SLV has reached an 85+ RSI, the ETF has seen:
- One-month average returns of -7.9%
- Three-month returns of -5.9%
- Six-month returns of -9.9%
- 12-month returns of -15.1%
Also note the low positive hit rate. SLV was higher after these extreme overbought readings 33% of the time, at best. On the 12-month timeframe, it was positive just 11% of the time.
Now, can SLV keep on its upward trajectory? Sure.
Just not much longer, I’d say.
That’s what makes right now a great time to take some much-overdue profits…
That way, you can rotate them into another revival that’s happening right now.
Small Caps Do Have Further to Go in 2026
Silver doesn’t get me excited after its rally.
I view small caps as the better opportunity, and here’s the evidence…
Like commodities, the small-cap space has undergone a monster-sized rally of its own.
I’ve been very vocal about my love for small, left-behind companies due to attractive valuations and Fed rate cuts.
And my bullish conclusion stands – due to a technical setup that most missed.
Back in late November, stocks were under pressure… especially the Russell 2000. Suddenly, the small-cap index ripped just over 9.8% higher in nine quick sessions:
Turns out, this burst often precedes a breathtaking rally in the following year and more.
Back to 1987, we were able to isolate 93 other instances where the Russell 2000 gained at least 9.8% in a nine-day session.
Periods with explosive action of this magnitude include: 1987, the early 1990s, late 1990s, 2000, 2008, 2009, and 2020.
More importantly, they’ve spelled great fortune going forward.
Since 1987–2025, when the Russell 2000 jumped 9.8% or more in nine trading days, here’s what happened next:
- Small caps jumped an average of 10.2% three months later
- Small caps climbed 16.6% six months later
- And they soared 28.9% 12 months later, on average
Plus – in stark contrast to silver’s track record – the positive hit rate of this small-cap setup is above 80% in all instances of the thrust:
Folks, we are in the early innings of boomtime for smaller, unloved companies.
Because they’re bound to get a lot more love once they start raising forward guidance this upcoming earnings season.
The companies who can pull that off are where the smart money will deploy capital… and where the best opportunities lie ahead.
Stay tuned as we continue to help you uncover stocks with strong momentum and healthy fundamentals with TradeSmith in 2026.
Regards,
Lucas Downey
Editor, TradeSmith’s Alpha Signals
P.S. from Ashley Cassell, Managing Editor, TradeSmith Daily: Luke’s research here on silver versus small caps really highlights what’s at stake when you get stuck with “dead money” investments…
Instead of shifting to the ones ready to accelerate into the fast lane.
Over at InvestorPlace, Louis Navellier has a special report ready to help your portfolio avoid what he’s calling the Hidden Crash 2026.
Watch his free briefing now to understand where the real risk is forming – and how to find the hidden innovators that can continue delivering outsized returns.
