Loading ...Dow/Gold Ratio Update
I posted the chart above in February of 2017. It envisions this ratio possibly reaching resistance near the 21 range.
As you can see, we are there now. So if my theory is correct, we should not see a sustained breakout above the horizontal blue line on the chart below. In my humble estimation, the long road back to 1 should start again in the not too distant future. Good luck gents.
Great chart. Thanks.
Thanks Neil,
Things were beginning to feel rather painful… until your FAB charts and prediction.
IMHO, this tweet by Leuthold Group (Via ZH & MarketWatch) confirms that your prediction is probably correct (ie. 75% certain, give or take about 12%): https://tinyurl.com/ycxocv4o
$SPX Price/Sales ratio at #Y2K bubble level while median $SPY P/Sales is more than double that of Feb-Y2K. Translation: Overvaluation in 2000 was highly concentrated; today it is pervasive […with the median S&P 500 Price/Sales ratio of 2.63 times more than double the 1.23 times prevailing in February 2000]. Chart here: https://tinyurl.com/y9htqmkg
ZH Comment: “Price-to-sales ratio is one measure of a stocks value. It isn’t as popular as the price-to-earnings ratio, or P/E, but is viewed as less susceptible to manipulation since it is based on revenue.” https://tinyurl.com/y94v7sry
I find it hard to see how with S&P at “pervasive” nose-bleed levels, your INDU-GOLD 21 resistance could be broken.
And ‘Cycle Trading’ has called an intermediate cycle low on GDX: https://tinyurl.com/ya2cnhhq
Great call… neverthelss I’ll probably still be nibbling fingernails for a wee while yet.
Good luck.
Thanks. The way things are looking, this ratio may begin declining as the stock market and gold move higher together. At least at first anyway. Time to pay the piper for all those free lunches we thought we were getting from Bernanke.
I am going to pour cold water on this Dow: Gold 1 to 1 theory
WHY does this HAVE to happen ?
It hasn’t happened since 1980 for goodness sake.
It was a brief moment in time…..a NANOSECOND ( see link of my chart below)
How many Goldbugs got crushed waiting for that 1:1 thing. CRUSHED….as in Financially Destroyed !
It’s a dangerous myth IMHO…that Gold and DOW WILL BE EQUAL ONCE AGAIN.
it’s a ridiculous notion
Here is another view with Fibs !
http://schrts.co/E6aWge
Dow:Gold 1:1 is a BIG Fib !
sheesh
It’s just a theory. I’m investing in PMs because I think economic law will benefit PMs going forward. I respect different views and I will change mine if my investments in PMs don’t work out.
In my view Dow:Gold 1:1 probably needs a hyperinflation in the USA for it to happen. Then the expanding wedge jaws of death type action in the Dow:Gold over the last 80 years on a log chart can take gold to 88x the Dow (Dow:Gold of about 0.012).
However, look what has happened to the jaws of death patterns on the Dow and the S&P500 over the past 18 years. They broke out to the upside instead. That makes things very interesting.
It’s strange because those expanding triangle/wedge patterns look like positive feedback loops. Usually something collapses at the end, or explodes.
It’s interesting that Armstrong is seeing a stronger dollar ahead. We are witnessing collapses of sorts in the UK and the Eurozone for instance. Personally, I think either or both of them are better candidates for hyperinflation than the USA.
We seem to be at a time when anything can happen, to either extreme but in reality, the stock market has just been grinding higher and higher.
Excellent points Dave.