Complacency and Confidence

The words associated with Wednesday's session.
The broad indexes are approaching critical levels of resistance, Intel beats the Street and ends near the lowest level of the day, - to say this performance was largely anticipated. The volatility index (VIX) make new lows, showing there really isn't much fear in this market. AlphaTrader has initiated a long position in volatility via VXX with a goal to stabilize the whole portfolio in case, just in case, everything is not that good the market seems to believe.

Silver and Gold were quite disappointing, failing to advance in this risk and inflation friendly environment. Looking at my favorite chart of gold to silver ratio, I find it looks indecisive at the moment.

To complete the pattern, the ratio should go at least to 55, which would give us 20 bucks silver with, say,  1100 bucks gold.  In fact, the task is not impossible, given the current weakness in USD which, in my opinion, should shortly land around 74

Will precious metals anticipate the bottoming USD and decline in advance or will we have a spike provoked by the fear of the global inflation. Despite the appearance, this market becomes very tricky. The gold to silver ratio is the thing to watch very closely.