Deep-Value Signals | Week 42 (Part 1): Big Rotation Day
This week is a bit of an unusual one..
First and foremost, I’ve trimmed most of my silver and gold positions to a minimum; at least for now. That’s not a change in my long-term conviction on the metals; it’s simply a tactical move as I see a clear capital rotation unfolding within the commodity complex.
Secondly, this week’s schedule will look slightly different. I’ll publish two updates (second one on Thursday) instead of Saturday, since I’ll be offline this weekend.
From there, we’ll dig into why I’m rotating, what the charts are showing, and how I’m positioning heading into the second half of October.
That’s not a “sell call.” I still hold physical bullion, and nothing changes about my long-term stance on sound money. But when I see a clear capital rotation inside the commodity complex, I move with it.
This isn’t about abandoning the trade. It’s about repositioning for better risk–reward.
Why the Rotation
For context: I track ratios, not headlines. They tell you when one group of assets begins to outperform another; the silent signal before the crowd catches on.
REMX / SILJ (Rare Earths vs. Silver Miners)
The ratio has broken out of a multi-year falling wedge after a textbook backtest of support.
Volume confirmed the move, and MACD turned positive on the weekly.
That’s a clean structural reversal; not noise. When a multi-year downtrend flips, you pay attention.
Gold / Silver Ratio
We’re seeing what looks like a breakdown, but it’s happening right on a long-term support cluster near 79-80. I wouldn’t exclude a false breakdown just yet; a push back above 80 in the short term remains on the table. I’m not betting on perfection - I’m dealing in probabilities, not certainties - but this setup tells me silver’s recent run might be stretched.
SILJ / Silver
The miners have run straight into channel resistance and look tired.
After a strong rebound from the lower band, this is where rallies historically fade before the next base forms.
Weekly
Daily
Silver
I’ve flagged the 53-55 zone for months. That’s the confluence of the 1980s monthly close resistance and the extended trend line.
A push through 55 on a monthly close changes everything. I’d gladly re-enter aggressively then. But until the market proves itself, I’d rather rotate capital into strength elsewhere.
Where I Rotated Into
This morning, I shared the names I’ve been rotating into; and yes, some of them have already moved sharply (50–80%), while others are still early in their setups.
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On Thursday, I’ll also be posting a short macro update - looking beyond the metals this time. It’ll focus on broader market dynamics, like the S&P 500 structure and the VIX setup.