Policy makers have done all they can to ignite the spirits of bi-polar market participants and they have swung to the opposite end of the scale, without fear of speculation and looking mighty right. Which of course means that blogs like this one continue to look mighty unsexy with messages of caution. So be it.
Here are the parameters on the Gold-Silver Ratio. They are to be taken in conjunction with several other indicators and financial signposts, which will be reviewed in NFTRH39 this weekend.
GSR (using GLD-SLV) will help end the festivities with a break above noted resistance and the top of the wedge. Alternatively, could those hopped up bulls actually break the GSR down and Hope '09 to new highs? Stay tuned.
GLD meanwhile, wants to fill some gaps to the upside after breaking the downtrend. Gold is still going with the Hope trade more than against it. A decoupling of gold from everything else would indicate the turn is on.
Contrary to the silver bulls' ever bullish view, I don't see a lot of bullish here. Can silver (SLV) rise? Yeh, look at that gap up there. But it will have to break and hold the downtrend line to imply anything more.
Edit (8:35) I just found this post by my pal Otto, where he explains the gold-silver ratio in a way that human beings can understand it. If you have any question whatsoever as to what I am rambling on (and on) about with the GSR, Otto decodes the message here in wonderfully simple terms.
