June 19, 2019
By Mish Schneider
Recently, I posted these exact same charts.
At the time, the ratio did not look ready to do much.
Since then, and with the help of lower global interest rates, the chart looks a bit different.
Are we getting ready to experience a sea change?
The top chart is silver.
If levels remain above 14.05, that could be a sign for the ratio to finally flip.
The bottom chart shows the moving averages and Bollinger bands.
The red line is the 20-day moving average.
Should the ratio levels clear that area, I would expect to see silver play some serious catch up.
Furthermore, with the prospect of the Federal Reserve lowering rates later this year, we could see inflation indicators also flip.
Plus, the dollar traded lower and with the weather conditions on crops dicey, inflation could go beyond what anybody wants to see.
Finally, with any trade settlement in China, I would certainly expect this ratio to continue to favor silver and other commodities as well.
I suspect that equities will get an initial boost, but could easily peak out and turn lower.
S&P 500 (SPY) 290 now the support to hold. 294.95 the all-time high
Russell 2000 (IWM) 152.75-153.35 now pivotal support. Really must clear 155.20.
Dow (DIA) 262.87 now support. 269.28 all-time high
Nasdaq (QQQ) 183.60 the 50-DMA support. 191.32 all-time high
KRE (Regional Banks) 51.40 support. Overhead resistance at 53.50
SMH (Semiconductors) 105.50 now pivotal support. 108.75 the 50-DMA resistance
IYT (Transportation) Still not drinking the Kool-Aid. Must clear 190 to look good. 185.50 pivotal. 183.50 support to hold
IBB (Biotechnology) 105.60 is the 50-DMA support. Stopped right at resistance at 108.60
XRT (Retail) 42.45 pivotal, 41 pivotal and 40.00 big support
Every day you'll be prepared to trade with: