Rather than trying to guess (and straight nominal TA is just educated guessing as long as existing trends are in place) what is going to happen in the broad market, we look internally. In the broads we use items like the XLV/SPY ratio. In the precious metals, commodity and resources areas we use the combo of the Silver/Gold and TSX-V/TSX ratios. Let’s update the situation.
The left panel of the chart below shows the preferred levels we wanted TSX-V/TSX to decline to before assuming a bullish stance. The ratio is dinging the first area now. The way markets push things to limits, I would not be surprised, and would actually prefer to see the SMA 200 (orange) banged for a test of support (ratios can have implied support or resistance because they are the product of two nominal items that have support and resistance).
The Silver/Gold ratio, while bouncing a bit today, retains its double top stance. A reminder that the double top does not need to mean the end of everything longer-term. But further short-term decline looks likely. All other things being equal, we’d want to see both of these items register clear downside objectives to build a bullish view amid the broad negativity fomenting out there right now, well beyond the PM/Commodity space.
In such a case, the SGR may not get all they way to upturning (orange) SMA 200 for a big time contrary play . If indeed we are looking at a seasonal relief party, SGR could simply tap the 50 day moving average while TSX-V/TSX taps the lower support level.
However… recall that TSX-V/TSX led Silver/Gold by several months earlier in 2025. Also note that TSX-V/TSX topped and dropped well before the SGR made its secondary high recently. It is conceivable, if not likely, that it could bottom first and turn up again while the SGR finishes its correction. That would be an even earlier hint than the two of these indicators rising in tandem would be.
A final note: While nominal markets far and wide, including gold stocks, gold and silver, are in uptrends, the two ratios above are still in big picture downtrends. So they have not yet made an internal bull case (w/ implications for the wider commodity/resources trades) on the big picture macro. If they were to bottom during this correction, turn up again hard and break clearly the downtrends, that could change the big picture macro and we would then be playing in a new 2026 macro, as speculated about in Sunday’s public article.
