My apologies in advance to Fullgoldcrown for the scenario put forth in this post.

Please note, however, that I am able to admit that I’m wrong if it becomes apparent that I am wrong.

Above is a chart of the Dow/Gold ratio I posted back in late February 2017. I theorized that the ratio had dropped from its peak in 1999 to a temporary bottom in 2011 which was roughly the half way point to its ultimate ratio of 1 to 1. The theory also suggested that this ratio could rise from that 2011 bottom around 5.8 to a 38.2% fib retracement and price resistance area around the 21 range. Note that this multi year bounce from 2011 is viewed as a corrective move in a long term trend downward.

Now it appears this ratio has broken out of another consolidating wedge and could be on a final impulse leg up to that 21 range. The measured price objective would suggest that anyway. The interesting part is that if the theory is correct, then very big things are shaping up for sometime in 2018. Once this upward trend reverses I think it will be quite eye opening. And while I believe the ratio will drop, I have no idea how exactly it will play out with regard to stock and gold prices. Let’s just say I think either gold will go up while stocks come down, or both will go up together but with gold outpacing stocks. Calculate that if you dare. We’ll keep watching.