We have shown the TSX-V/TSX ratio to move in positive correlation with inflationary market phases and today it continues to be constructive for more upside as it continues to hover above the 50 day average.
For newer subscribers, we used the surge above the now-upturned SMA 200 and then the yellow diamond consolidation pattern as bullish guides earlier in the year. If TSX-V/TSX takes another leg up it would be positive for the reflation trades, including the precious metals, which have consolidated for as long as this ratio has consolidated. We’d expect silver to out-perform if so.
The weekly chart shows the upcoming congestion areas.
The monthly chart shows how far the inflation trades have fallen since the bubble days.
The nominal TSX-V is similar on the monthly chart. But it is still constructive for having made a bottom of some kind. Just fantasizing here, but if this were to ever escape into a new bull market by taking out the noted resistance line can you imagine how some of these junior miners would pop to the upside? Okay, relax. :-)