Best of the Week
Most Popular
1.Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - Harry_Dent
2. Is This How World War III Begins, In Almost Complete Silence? - Jeff_Berwick
3.Trump Wins 2nd Presidential Debate, Betfair Betting Markets Odds Bounce - Nadeem_Walayat
4.Why Krugman, Roubini, Rogoff And Buffett Dislike Gold - GoldCore
5.End of SPX Stock Market Correction Nears - Tony_Caldaro
6.Get Ready for the Future - Exponential Machine Intelligence Mega-trend towards Singularity - Nadeem_Walayat
7.US Housing Market Bubble II – It’s Happening Again! - Andy_Sutton
8.FTSE BrExit Stock Market Panic Crash Resolves towards New All Time Highs - Nadeem_Walayat
9.Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - Nadeem_Walayat
10.Gold’s, Miners’ Stops Run - Zeal_LLC
Last 7 days
The Stock Market is an Accident Waiting to Happen - 20th Oct 16
It's Rally Time for Gold and Silver Equities - 20th Oct 16
Cashless Society – Risks Posed By The War On Cash - 20th Oct 16
China's Insanely Leveraged Housing Market Will Enter Its Secular Bull Market In 2017 - 20th Oct 16
Donald Trump Bounces Going into 3rd and Final US Presidential Election Debate - 20th Oct 16
Attention Please: Phase Two of the Gold and Silver Train Now leaving the Station. All Aboard? - 19th Oct 16
How to Successfully Trade a Stock Market Crash - Black Monday October 19th 1987 - 19th Oct 16
Tesla, Apple and Uber Push Lithium Prices Even Higher - 18th Oct 16
Silver, Debt, and Deficits – From an Election Year Perspective - 18th Oct 16
UK Property Market: Slow Growth Does Not Equate To Decline - 18th Oct 16
Trump Election Victory is in Your Power - 18th Oct 16
Stock Market More to Come! - 18th Oct 16
This Past Week in Gold and Silver - 17th Oct 16
A Falling Stock Market Cannot Be Allowed - Financial Repression Is Now “In-Play”! - 17th Oct 16
Commodities, Forex and Stock Market Trend Forecasts - 17th Oct 16
Stock Market Crash..or No Crash? - 17th Oct 16
A perspective on risk rally – Risks abound but Stock Market is Confident - 17th Oct 16
Bank of England Blames Brexit for Sterling Drop Inflation, Masks QE Money Printing Cause - 17th Oct 16
From Piety to Pride to Pity, America's Racial Divide - 17th Oct 16
Is Obama Juicing US Government Spending To Get Hillary Clinton Elected? - 16th Oct 16
Seek Your Independence: Anything Else Will Destroy You - 16th Oct 16
SNL - US Presidential Debates, 1st, 2nd, VP - Like You've Never Seen them Before! - 16th Oct 16
End of Economic Growth Sparks Wide Discontent - 16th Oct 16
Donald Trump on Life Support, May Abandon Election Campaign and War on Republican Party - 15th Oct 16
The Gold Manipulators Not Only Will Be Punished, They Have Been Punished - 15th Oct 16
Black Votes Matter - Is the US on the Verge of Mass Race Riots? - 15th Oct 16
Gold Stocks Screaming Buy - 14th Oct 16
Brace Yourself for the Quadrillion-Dollar Reckoning - 14th Oct 16
The Next Recession Will Blow Out the Budget - 14th Oct 16
John Mauldin: My Infrastructure Plan to Save the US Economy - 14th Oct 16
World War III On The Brink: War Will Continue Until It Triggers Economic Collapse - 14th Oct 16
US T-Bill Rejection At Ports In Progress - 14th Oct 16
These 2 Debt Instruments Pose Peril to Millions of Investors - 14th Oct 16
China’s Rocketing Housing Market Real Estate Bubble - 14th Oct 16
DIY Winter Home Maintenance Money Saving 22 Point Checklist to Get Ready for Winter/Fall - 14th Oct 16
US Stock Market, Big Picture View - 13th Oct 16
Stock Buybacks Main Force Driving Bull Market; Rewards Investors and Starves Innovation - 13th Oct 16
SPX Gapping Down... - 13th Oct 16
Syria - Obama Stepped Back From Brink, Will Hillary? - 13th Oct 16
The Structure and Future of Gold in the Investment and Monetary World - 13th Oct 16
Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - 12th Oct 16
Gold and Crude Oil - General Stock Market Links - 12th Oct 16
Samsung's Galaxy Battery Just The Tip Of The Iceberg - 12th Oct 16
Hillary: Deceit, Debt, Delusions (Part Two) - 12th Oct 16
Gold and Silver Metals Show Strength Relative to the USD Index - 12th Oct 16
Announcing Trader Education Week -- a Free Event to Help You Learn to Spot Trading Opportunities - 12th Oct 16
Confirmed Stock Market Sell Signals - 11th Oct 16
Hillary Deceit, Debt, Delusions - 11th Oct 16
Trump Support Crashes to New Low of 6.4 on Betfair Odds Betting Market - 11th Oct 16
The World Is Turning Dangerously Insular - 11th Oct 16
An American Tragedy: Trump Won Big - 11th Oct 16

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

LEARN to Trade

Betrayed By The Gold Silver Ratio ? Gold Bug heresy? 

Commodities / Gold and Silver 2016 Jan 12, 2016 - 12:03 PM GMT

By: Denali_Guide


“ET TU BRUTE ?” “Cuo Bono ?”

         “It's a long time from now to never....” Says 'John Snow' in Game of Thrones. In my opinion, probably as far as from here / now to “It must go back to....” uttered so much in  the worship of the Gold Silver Ratio (GSR).   And yet it doesn't, at least not until you suffer your stops being run and a loss of capital, or worse.  Your Capital was just betrayed at the hands of The GSR.

 And it was supposed help you, yet it stabbed you in the back.  I guess that is a lesson you shouldn't fool around with a naked Gold Silver ratio, no ?  I can talk later about how a “gussied-up GSR might work.

         In my experience far more tears than dollars came from using the GSR.

         Yes it betrayed you and your capital too.  Like the YouTube video,

 “Its GONE”!

         The Gold Silver(GSR) ratio has run from Negative numbers, to triple digits.  But  no matter what formation it is, nothing MUST Happen by virtue of its appearance on a chart.   Over time, some over/under shoots of mean measures, may return to the area of the mean, but that does not specify when or for how long.  Its easy to point to the historical extremes and say because its a “coiling formation”, it MUST return to the mean.  I don't think anything could logically be further from the truth.  The measure, in this case, the GSR, may run in that direction but is compelled by NOTHING to move that way.  After experimenting with the GSR(Gold Silver Ratio), I cannot ascertain any “force” that would make the GSR return to any particular level.  I know it is a warmly held belief amongst us Gold Bugz, but I can't hold onto it anymore.

        SPREAD TRADERS can profit using The GSR as a rough guide to timing,  ultra long term or very short term.  Gold Bug style Investors capital, get either a figurative death or dismemberment using GSR.  Think the last time you had your stops run out from under you while you were sure either Gold or Silver “Had To” run wild based on a very distorted GSR.   I bet no one wants that outcome again, except whomever was running your stops.

         Please Google “Images” under the “Gold Silver Ratio” heading if you want a good picture of what I find an inaccurate and confusing measure for GoldBug Investors to attempt to use. 

         What the heck are we supposed to do now if we cannot trust the GSR to help us profit ?   Stop using the GSR naked  !!  Like when you find yourself in a hole, stop digging yourself deeper !!  The second part of this, the Real Answer,

was so succinctly put by a not-famous but successful  acquaintance who has a way of summing up, in this case “I am always more interested in getting the direction correct than trying to decipher the extent of the move. “.  So if you want to get a bit more deeply into now to use a “Gussied-Up” GSR, instead of a naked GSR, THE REAL ANSWER,  get the full story on my blog:  where we start on how to actually use GSR data to your advantage.  -> ET TU BRUTE ? By Denali Guide

To the the charts involved, go here, to my Public Stock Charts Portfolio, and go to the last section.  All charts update automatically.

© 2016 Copyright Denali Guide - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2016 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife