I have been following the gld/slv chart since it's breakout in early August. The ratio is an excellent proxy for the overall health of the financial system. To make a long story short, when silver get's thrown out with the bath water and gold holds relative strength, something is fishy and coming down the pike. There are benchmarks to follow with this ratio. During the peak of the S&L crisis, the gld/slv ratio got above 10 (in the true commodity it would be over 100). To date, this crisis has gotten to 9.2 back in early October. Is that the top? I doubt it. Is it the top for this markets October/November bad news bolus? Perhaps. It should resolve itself in the coming days. We either consolidate here, or break the shoulder of this H&S top.
Posts
