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<p>[QUOTE=&quot;InfleXion, post: 1269064, member: 29012&quot;]I know there&#039;ve been other threads about this subject, but what I&#039;m curious about is what the gold/silver ratio is doing right now from an analytical standpoint. It appears to be making a wedge, and my understanding is that typically when lines come to an intersect like this it often foreshadows a strong move to either direction. My question is, which direction seems more likely at this point?</p><p><br /></p><p>[ATTACH]138556.vB[/ATTACH]</p><p><br /></p><p>Another thing I&#039;m curious about what may have caused the sheer dropoff in the stochastics (blue line on bottom segment) at 2010-09? This coincides with when the ratio took off on a linear path in favor of silver for the next 8 months.</p><p><br /></p><p>You can clearly see the change after the margin hikes in May, and the stoachastics responded by jumping to the upside in favor of gold. Even though the link points out that the stochastics are currently rising it looks the moving average (red line on bottom segment) may be in the process of making a double top similarly to the span from 2009-10 through 2010-04. However, the blue line would need to cross over the red line in order for that to reach fruition (link/image at very&nbsp; bottom explaining why).</p><p><br /></p><p>My guess is that since the wedge formation portends a strong move potentially, and since the stochastics have a lot more room to move down than up, that that is the path of least resistance. If silver is to be hit harder when prices fall, then the reverse assumption is that prices should rise if the ratio moves in silver&#039;s favor. If it moves in gold&#039;s favor then we would probably be looking at lower metal prices. This will probably be more influenced by how much fiscal policy impacts &quot;risk-on&quot; vs. &quot;risk-off&quot; mentality than anything else, but I thought this was an interesting study, and may have some relevance going forward.</p><p><br /></p><p><br /></p><p>Info from the original link at:</p><p><a href="http://www.thebulliondesk.com/news/?id=29264&amp;v=47&amp;lang=en&amp;cid=145194&amp;type=1" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.thebulliondesk.com/news/?id=29264&amp;v=47&amp;lang=en&amp;cid=145194&amp;type=1" rel="nofollow">http://www.thebulliondesk.com/news/?id=29264&amp;v=47&amp;lang=en&amp;cid=145194&amp;type=1</a></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p>Stochastic assumptions taken from the following site and subsequent image:</p><p><a href="http://www.thestreet.com/story/10407881/1/technical-stock-picking-how-to-trade-off-of-stochastic-oscillators.html" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.thestreet.com/story/10407881/1/technical-stock-picking-how-to-trade-off-of-stochastic-oscillators.html" rel="nofollow">http://www.thestreet.com/story/10407881/1/technical-stock-picking-how-to-trade-off-of-stochastic-oscillators.html</a></p><p><br /></p><p>[ATTACH]138552.vB[/ATTACH][/QUOTE]</p><p><br /></p>

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