Gold-Silver Ratio and the Outlook at Housing in Silver Terms
GOLD-SILVER Ratio since 1981:
The ratio decisively CHANNELED-DOWN below the historical UP-Trend keeping the major DOWN-Trend intact; that makes Long-Term investment in SILVER more attractive then investment in GOLD.
GOLD-SILVER Ratio (6 year chart):
As long as the ratio declines and stays within the channel, the trend is considered bearish. Please note the symmetry in the "ABCD" zigzag that confirms the validity of the DOWN-Channel.
GOLD-SILVER Ratio (3 year chart):
Since there is no exact science about the market, we should not use 2 year cycle as a precise measuring stick, however we could apply it together with other technical indicators in order to approximately time the next significant low for the ratio. It seems that we still have time and the ratio may reach the upper bound before it touches the lower one again.
HOUSING INDEX-SILVER Ratio (3 year chart):
Housing index has being discounting in Silver terms since July 2005 until the very recent changes in September 2006, but until the new trend is defined there is no rush to switch the horses and bet on $HGX. The reason that we looked at the HOUSING-SILVER ratio is because there were so many bad news on real estate lately which usually occurs at the bottoms....