Thursday, September 8, 2011

Desperately Seeking Silver


The charts below are comparative studies of how silver and the euro have trended over the last year. I thought I would smooth things out a bit by simply presenting their respective moving averages (10 day SMA) and Bollinger Band envelopes. Perhaps I am overindulging my biases here, but it is a slow day and I am always looking for another perspective on things.  

After hitting the mat together back in the Spring, they have trended very closely. My expectations are for much of the fast (some may call it dumb) money now chasing the misguided prospects of QE3 to be wrung out of silver as it follows the now technically and fundamentally broken currency lower. As in my previous notes on this correlation, there is typically a lag of a session or three.