Thursday, 14 April 2011

Ross Clark's Silver Exhaustion Alert vs Ronald Watson's SLI. - 2011-04-14

In reply to Howe Street Broadcast by Ross Clark this week:

I was reading some old articles by Roland Watson who used to write on silver and he had a thing called the Silver Leverage Indicator or SLI. It is based on (or is in acuality) the rate of change of silver divided by the rate of change in gold (in percentage terms I guess). I have noticed that sometimes silver has been moving 3x as fast as gold in % terms when the Au:Ag price ratio was about 40 or 45:1, giving a 12-15:1 dollar price move gold:silver. However, I cannot find a reliable quantitative description of his indicator. but the silver: gold leverage has been very high recently, no doubt.

Interestingly, on Eric King's program weekly metals wrap last weekend, and he described a $2.87 weekly move in silver versus a $45 weekly move in gold. Interestingly, the ratio of the gold to silver move is 15.68:1 in $ terms, about the same as the classic Isaac Newton gold:silver ratio under the bimetallic standard and silver's % move being more than twice that of gold, as has been the case for a while.

I guess the Silver Leverage Indicator of Roland Watson would be analogous to the RSI on the silver:gold ratio, as silver rises much faster than gold, both the SLI and Ross' RSI would go into high territory.

Very interesting stuff:

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