Dear Slopers, this is a chart I have looked at a few times in the recent past, since the curve began topping. As long as the gold-silver ratio (GSR) declines, the casino is open for business. Will the curve lead this time? The reference to 'Otto' is regarding an exchange I had with a pal last week about Prechter's credibility.
Just looking at this for the first time in a while, and I don't like it one bit. Readers are free to have their own opinions.
Everybody's getting bullish again, and the excuse is relief post-Japan, as decent economic numbers roll in (in some areas). This is not an Armageddon blog and I am not a perma bear writer. The fact is however, that the curve has turned down strongly, as it did in 2008, pre-crash. Yet the Gold-Silver ratio has not yet responded (and may not, but then again…) by signaling an intense and acute liquidity suckage.
I am just saying, you have profits? It's legal to book some of 'em. Cash is a position along with whatever else one favors. Me? I will wait for HUI to confirm something one way or the other. I am bullish the gold stocks either way, but then again, I can stand 50 to 100 point swings on the HUI because I manage risk. Probably sad (for me) to say, but this may include short silver once again, although more likely I'll look to book cash and short other areas.
Sometimes it seems to be a curse looking at these below the deck indicators because they can sometimes scare the crap out of me while the party up on the upper deck rolls on. Punch bowl and all.
Sometimes I feel a bit like Prechter, poor discredited and lampooned soul that he is. Last week's thing with Otto sticks with me, and I do not like the surety with which bulls hold to their case. I was weened on Prechter, Hoye and yeah, a bunch of crazy gold bugs. Thus, I do not have such a sure feeling that policy makers can/or will continue to promote the inflation, uninterrupted. I have to remind myself that I was generally bullish when many of today's loudest, most staunch bulls were sucking their thumbs.
So to repeat, I don't like this chart. It may be nothing, but it may be something.