Tuesday, November 29, 2011

Ratio Ratio

I must be going crazy penned into my office for days writing story after story while it is 60 degrees and gorgeous outside here in the Northeast (yes, I saw the rain this morning).   The song Radio Radio by Elvis Costello comes to mind as I write this about Ratio Ratios.
Here is another one of those ratios derived from the markets and not from some analysts' guesswork. This one is the copper/gold ratio in the form of the JJC copper ETN divided buy the GLD gold ETF.

When the economy is hot, copper is in demand and gold is out of favor. The ratio should trend higher. And when the economy is not, copper is not in demand and gold is everyone's baby.   The big blue Landry arrow is pointing down.

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