Tuesday, September 16, 2008

The only chart that matters (to me, at least)

I really don't see any point in closely regarding ratio charts when we're in a totally unprecedented situation. My acceptance of TA is limited at the best of times, but anyone with unshakeable beliefs right now based on MACD or RSI or whatevs is going to get guffawed from chez Otto. An example is the gold:silver ratio, as even I bought into the "silver is way cheap relative to gold and it can't possibly stay cheap relative to gold like this any longer". That was with the GSR at 66X. It topped out at 72X and is still at 70X right now.

And I swapped my GLD for SLV. Chartists, huh?

Anyway, this is the only chart worth following, and despite a clear violation of the line last night somewhere in PacRimlandia (happily I was asleep; what you don't know doesn't hurt you) the $3.10 line is being held again this morning.


Until this is breached, I see no reason to panic myself out of FCX, CS.to, ARG.to and all the other solid copper producers (with the emphasis on the fact they produce). But as I've mentioned on several occasions here, if Copper $3.10 is clearly broken, I sell out at a loss and wait on the sidelines. So be it.

US futures market is pointing downwards this morning, but nothing seriously downwards. Let's see how today unfolds, but be clear; the world is not coming to an end, no matter what goldbugs and nutbars might want you to believe.