Market Minds

11:15am EDT: While we are enjoying the whipsaw from hell I thought I’d share something completely different and more related to our long term outlook on things: Someone mentioned the gold/silver ratio in the prior thread and rightfully stated that a rising ratio was bearish for the economy. What I’m seeing right now is either the conclusion of long 5th wave or the finale of a 3rd - bear in mind that commodities have a habit of extending their 5th waves, whilst in equities it’s usually the 3rd. See both tentative counts above - it’s preliminary but seems fairly clean. In any case - looks to me that we have now switched into a bullish trend in the Gold:Silver ratio - meaning that Gold will continue to ‘outperform’ Silver - I put that word into quotes since in reality Silver will drop faster than Gold. I still expect Gold to breach its 680 low either this year or early next year. But the real action is in Silver - if you are interested in trading the shiny metals then consider the chart above as this is how I see things unfold. Right now we’re pretty shot to hell and I am waiting for a meaningful bounce to sell some ZI futures. I won’t touch SLV or GLD options ever again - even ZI or ZG options lose too much theta during the whipsaw periods. A good friend of mine who has traded Gold for over a decade just had to watch his ZG puts expire after which Gold started to drop hard. While I’m typing this equity futures are dropping hard - I basically decided to fade all this nonsense until we either breach SPX 870 or touch 907.

More:
Shiny Metals