Just trying to give you data points that I think are relevant as they crop up…
In NFTRH 359 we put a lot of effort into looking ahead to a time when the Gold-Silver ratio (GSR) may find heavy overhead resistance. That time could be a signal on the next inflation trade as the more inflation-sensitive silver out performs gold.
But we also noted that big macro charts move in slow motion and that there is still significant upside left in the GSR. Today GSR is down again, but also still appears to be in consolidation, not correction (above the moving averages). In other words, gold vs. silver could be readying its next leg up.
That message seems to be backed by commodities and precious metals, which are negative today, despite the GSR’s ongoing consolidation.
The stock market’s reversal (in the time it took to write the last update) could also be foreshadowing an upturn in the GSR. This supports our cautious, cash-heavy, patient stance, especially considering how far the VIX has come down (to the original target zone). Note how VIX and GSR have consolidated together.
While they are still in downward consolidation, an eventual rise by GSR and VIX would go hand in hand with bearish activity across many asset classes. These are caution signals; caution flags if you will.
Our internet is down this afternoon and I am using my phone as a WiFi hot spot. Hopefully this will not be an enduring issue, but I wanted to mention it in case there are any interruptions over the next day or two.
