NFTRH+; updating a key indicator

The previous (public) post updates the ongoing sideways situation in the Copper/Gold ratio, one of our cyclical/inflationary vs. counter-cyclical dis-inflationary indicators.

Here let’s review the TSX-V (CDNX)/TSX ratio, which normally tends to run in positive correlation with commodities, but lately has not done so. Here is the big picture monthly log scale chart showing the disconnect and divergence over the last year.

The theory has been that if TSX-V/TSX gets in gear it could signal a speculative inflationary upside hysteria and blow off. If it continues to diverge, it could signal an impending end of the inflation trades.

Here is the up to the minute daily chart view of TSX-V/TSX. Moving average trends are firmly down but the ratio has taken out and so far held the 50 day average while bringing both RSI and MACD into positive territory. At worst as it stands now it is still in play as a candidate to do some upside catch-up work. It is also near a point where it could fail by losing the 50 day average.