Liquidity by Gold-Silver Ratio - Gary Tanashian

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Gary Tanashian is proprietor of Biiwii.com. Actionable, hype-free technical, macro economic and sentiment analysis is provided in the premium newsletter Notes From the Rabbit Hole (http://www.biiwii.com/NFTRH/subscribe.htm). Complimentary analysis and commentary is available at the 'Biiwii Blog'... More

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Liquidity by Gold-Silver Ratio 0 comments

Sep 13, 2011 6:54 AM | about stocks: GLD, SLV, QQQ, DIA, SPY, GDX, GDXJ

This snippet is 2/3 of a page from a letter (NFTRH152) that had 23 of them:

Edit (9:16) Dear subscribers (and blog readers), global markets are plunging and US markets are down again in 'pre'. We have our new parameters per 152's analysis. I do not know how this will affect the gold stock sector, but if the downside HUI parameter is violated, all bets are off for a while. My friend at IKN, while remaining bullish the PM's, published a contingency stock sale plan this week, and while I initially questioned why, I think he was very wise in doing so in hindsight.

As you know, I began implementing a hedge plan last week (due to the realization that I have made decent gains in a market wracked with losses as opposed to any swami-like crystal ball gazing). The GSR below will be the arbiter to some really nasty stuff if it triggers. So let's see how things go today and going forward.

Liquidity by Gold Silver Ratio

Men of great import and even greater ego actually seem to believe they can control their (and our) little worlds. What we are witnessing in the global sphere now is the loss of control, as gold vs. currencies and gold vs. asset/commodity markets rises. That leaves the gold-silver ratio and folks, if the immediate resistance (red) and ultimately the yellow zone on this ultimate liquidity indicator breaks to the upside, the loss of control is going to be stunning.

The GSR has a bullish look about it as it consolidates the initial impulse higher. Of course NFTRH was all but certain of a new uptrend after the consolidation out of 2008, until the Wizard pressed the QE button on his console behind the curtain.

If things get bad enough now, I am sure Paul Krugman will write his columns, Lyin’ Larry will give some spin, Robert Reich will jump up and down, and the man the inflationists call ‘Helicopter Ben’ will do his thing. But with real (as opposed to implied – by Treasury bonds) confidence on the wane and the public already wary about the obvious failures of QE’s 1 and 2, this could get very ugly if the law of diminishing returns should assert itself and the economy fails to give even a pretense of positive response.

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Themes: gold, silver, inflation, deflation, economy Stocks: GLD, SLV, QQQ, DIA, SPY, GDX, GDXJ

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