Today is COT day!

The second Friday of each month is helpful to review the current market sentiment and find extremes.

Professional investors find the Commitment of Trades reports (COT) to be the most helpful with reviewing market sentiment.

Most assets that trade in the futures market has a COT report, including bonds, stock indexes, currencies, and a wide range of commodities.

Industry professionals trade futures as a way to protect their businesses from price fluctuations.

Speculator sentiment is a "contrarian indicator." Speculators are usually extremely bullish (expecting an asset to go higher) at market tops and extremely bearish (expecting it to go lower) at market bottoms.

So when speculators are wildly bullish, it's a warning sign… And when they're overwhelmingly bearish, it's a sign the asset may be ready to rally.

Silver is showing some interesting sentiment.

In the chart below, you can see that silver speculators' positions just moved back into extremely bearish territory. They are once again nearly as bearish as ever before. But prices have found support at these levels…

If silver starts to rise, it could explode to the upside as the bearish speculators buy it to cover their short positions.

Silver is good financial-disaster insurance in a risky market.

If you're interested in buying physical silver I suggest you purchase low premium bars or coins. Or if you're looking for a shorter-term trade, you can consider buying the iShares Silver Fund (SLV).

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.