This graph is a composite of the SP500 (with a 2 std deviation linear regression). It also contains graphs of VIX, put/call ratio, and OIL. Observations: The put/call ratio peaks and signals the future peak in VIX. After VIX peaks, SILVER bottoms (in March is was two days later). OIL has fallen below its 50dma and although a bounce is expected from oversold RSI, it should continue its decline. If it does, credit conditions should tighten (HYG) and deflation and a lower GDP should follow (setting up Quad 4). Silver should fall with equities. Strategy: ride the VIX peak (signalled by the put/call ratio) and then transfer into SILVER. **not investment advice, do your own research. Comments very much welcome**
Trade active
⋅
The two histograms below the graph are 1. SPX correlation to USOIL, and 2. SPX correlated to SILVER
Thanks for the analysis! So you expect Silver to fall short-term in line with equities, but rocket once vix peaks and declines?
WalterBrown
⋅
@Lionhead, yes, I believe a sell off in equities or panic (either linked to Covid or presidential election) will lead to a short squeeze in the USD that will impact precious metals. After the upcoming bear market I expect precious metals to shine again before equities.