Folks, I again remind you to ignore updates that you may feel offer too much noise for your investing/trading style. But for me it is not noise, it is maintaining a consistent view during what I think is a sensitive market phase (decision points between the “extended party” and “imminent bearish” views).
So with that stated, let’s check out the Gold/Silver ratio, which is the comparison of a less inflation-sensitive, less cyclical, more monetary and more risk-off metal vs. one that is more inflation-sensitive and cyclical (industrial) and more risk-on in character.
The Gold/Silver ratio (GSR) is on a surge today, back above the pattern and ticking a new high. If that becomes indicative of further upside to come the macro indications are anti-inflation, anti-cyclical assets and pro-risk management (which I’ve been doing all along, anyway).
If the GSR is accompanied by a rising Gold/Copper ratio (GCR) the signal is magnified, as copper is the ultimate cyclical and pro-economic metal. As you can see, the GCR is down a teeny today but has recently reclaimed its intermediate uptrend marker, the SMA 50. It has also turned its major trend up with a rising SMA 200.
Meanwhile, the USD (DXY) is still above its SMA 50 and base-breakout support in the low-mid 107s.
Bottom Line
Today may simply be a lurch toward risk off amid the market’s Trump-enthusiasm rally. A failure by these 3 charts would indicate a big upside party, perhaps as the bull market’s ending act. But all 3 of these items are postured the other way and hence, caution or at least awareness of these internals, is advised as long as that is the case.
Excellent Gary. And please keep this kind of analysis coming. I would have to imagine that most of your subscribers come to — and stay with you — for exactly this kind of service. You’re not the only “geek” out there that loves this kind of stuff!
Will do, Tom!