The Demand Index & The Prospects for Gold/Silver

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Today I would like to introduce you to an indicator I have not written about before.  It is called the Demand Index and was invented by James Sibbet.  As with the True Strength Index (TSI) indicator, I have used the Demand Index indicator for about the past 4 years.  Interestingly, its interpretation is very similar to that of the TSI.  When the indicator reads above ZERO, buying pressure is greater than selling pressure, and the opposite when below ZERO.  It does lend itself well to the consideration of trend line breaks and both positive and negative divergences.
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Anyway, the Demand Index is a very sophisticated indicator that incorporates price and volume to give a ratio of buying and selling pressure.  In this respect it is similar to the Money Flow Index (MFI) indicator that I have frequently demonstrated in past posts.  The only free software that includes the Demand Index, that I am aware of anyway, can be found at www.ThinkorSwim.com

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This first 4 hour chart is of the continuous Gold contract and the indicators below price are the TSI set to (25,13) and the Demand Index set to (13).  What I find note worthy is that since the high reached December 7th, both momentum (TSI) and buying pressure (Demand Index) have persisted with readings below ZERO.  This suggests to me that a trend is setting in and the trend is not favorable at this time for upward price movement.
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Click on the chart to ENLARGE

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This second 4 hour chart is of the continuous Silver contract with the same two indicators positioned below price.  Though Silver has definitely been a stronger performer than Gold this fall, the Demand Index in particular suggests strongly to me that price could begin to fall apart at any time.  It appears that while price has continued to trade sideways, buying pressure has been anemic.  If I were to put the accumulation/distribution indicator on the chart I would expect to see a significant degree of distribution.  Essentially, the smart money has been unloading to the new money at this price level - and my guess it is only a matter of time before price begins a trip in the southward direction.
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Though it does not show up on my TSI Trading record, I have sold a futures contract on the SP-500 (shorting the stock market). Also, I will continue to hold my ZSL position (short silver).
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And finally, the weekly sentiment data published by Investor's Intelligence came out yesterday.  It revealed that the percentage of investment advisers bullish increased from last week's reading of 56.8% to 58.8%.  The post I wrote SP-500: Look Out Below is more true this week than last week when it was written. The 'other shoe' has not dropped yet, but rest assured, it will.