Loading ...DOW : GOLD RATIO
OK …Be honest Goldophile People.
We inherently flock to Gold markets because we see all General markets as way over bought and obscenely and irrationally expensive and corrupt . We were partying for a while there but now what ?
When it comes right down to One Chart …This is THE one…for Goldophiles.
Most Goldophiles ( ex goldbugs) look both ways now to see what’s coming for their favorite market.
That’s what we are all about here …Goldtent , Rambus Chartology . Spock Miners and Spock Global , Surf City Cycles
We want to “Play” in this market BUT we don’t want to loose again…like in 1980 to 2000 and like in 2008 and like in 2011 .
Right Now Spock has posted at his site that he believes the QQQ:NEM ratio has peaked.
Spock is no chopped liver chartist. his charts are Very different at times but when you see them you know they are outside the box…but..very “Logical”
….I like to use the DOW:GOLD RATIO….so Here are the charts with my own biased lines .
Daily…BULLISH GOLD ( critical spot here…eyes open)
Weekly…BEARISH GOLD ( Impulse move up….H and S Continuation pattern still in play…breakout UP would break gold !
Monthly…BULLISH OR BEARISH ? You decide !
Spocks LT analysis based on some compelling cycles say this ratio has put in an important top.
If So…Goldtent is going to be a Happy Oasis. Park your Camel and come on in.
Just remember that ratio charts are not the end all and be all.
What would SLV to GLD, or HUI to GLD have told you in 2011?
Probably to back off on longs. But would they have warned of a bear market for all of them?
And even Dow to Gold in the fall of 2007 probably didn’t tell you to get out of BOTH.
Just like any ratio chart for SPX to TLT couldn’t have told you back up truck for BOTH in 1982. Is there a ratio chart that can tell you to short them both? If that time is nearing, and it could be, I’m not sure what single chart can tell you that.
Good points Pedro.
But This ratio chart pair is always interesting
When its better to be in Stocks and when better to be in gold
Let’s be honest, anyone who was paying attention to what was happening during the 2008 financial crisis knows that if the Fed had not spent trillions and lowered rates to zero to bailout entire industries in this country, the Dow would likely have dropped to 2000 or even lower when you think about it. In fact, many companies in the Dow itself would have gone to zero had these measures not been taken. And when you see that gold topped in 2011 at almost $2000, it’s not crazy at all to think that this ratio would have easily reached 1:1. But with the Fed’s actions, hope was given to the masses that everything was fixed and the party was back on. In reality, the final reckoning was just delayed. So now the question is will the Dow drop to meet gold or gold rise to meet the Dow, or somewhere in between.
The bottom line is this: central bank liquidity and bailouts can delay the day of reckoning but never avoid it. The longer things are delayed the worse it will be when things do get back to fair value. Delay things long enough and the currency dies which is the ugliest outcome of all, i.e. Venezuela right now.