As it turned out, the ratio was only making the left shoulder of a H&S topping pattern that NFTRH also came to manage later. As it turned out, a lot of the disturbance in the ratio was due to Silver's blow off to 50 last year. SLW-SLV lost support levels (green lines) but has been slowly climbing back ever since spring of 2011 when the mini bubble blew out into the Euro crisis. Boy what a tout that was in silver.
Anyway, SLW-SLV is working its way back above 1.10, which is the neckline to the H&S. What's it mean? Hey look, no one indicator is going to give us a pot of gold. But it may be worth reintroducing this one going forward as another signpost along with the likes of SLW-RGLD and a whole host of others.
It's the invisible world of ratio indicators and their messages, which go unheard by most casino patrons. Hmmm, wonder what JNK-LQD is doing right about now? :-)
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Looks like a rising wedge to me.
ReplyDeleteNah, not really. Besides, rising and falling wedges are the most hyped TA patterns compared to their actual effect, which is often either in the 'wrong' direction or minimal. It is almost as bad as the DEATH CROSS of MA's 50 and 200 that TA guys like to scare everybody with. Total bullshit most of the time.
ReplyDeleteOf far more importance to the subject of this post is the ratio's proximity to lateral support and resistance.