There are internal indications in all markets. Different ways of seeing things inside markets that many do not see. In the broad market there are leadership ratios like SOX>NDX>SPX, risk ratios like XLV/SPY and many more, including junk bond spreads and a lot more ways of looking at things beyond just nominal market technicals, economic data, etc.
In this case, we are using “internals” of the Canadian stock market and the precious metals to gauge the environment for our preferred strategic commodity/resources trades (REE, PGM, Uranium, etc.). At this time the TSX-V/TSX ratio and the Silver/Gold ratio are furthering their “intact” status and remain a tailwind for the investments noted above and plenty more.
I wanted to add a stock, but thought “first, lemme check the ratios” and sure enough, they were supportive.
TSX-V is ticking another notch higher vs. TSX.
Silver is as of now looking good vs. gold.
These are the kinds of pictures I look at in order to maintain my “week-to-week” bull orientation. As of today, they look good.
We should understand that if/when a disaster comes around with little warning (one of those market days that feels shockingly bearish) these positive indications will crack in real time.
But the other option is that they could also start to diverge before the surface level markets get hit, which would be a clear warning. You can go months worrying about what could happen. Or you can proceed and stay the course (trading/profit-taking as desired) as long as the underlying indications are good. Right now they are.
