Loading ...Gold:VIX Ratio Out of Correction Territory
“A” bottom could have been made for the S&P500. Corrections have ended when the GOLD:VIX ratio breaks above 60. Not calling “the” bottom, just that “a” bottom has been made.
We could very well see another drawdown for the S&P500 but bulls have some hope (for now).
May see another backtest of the 60 line. A similar backtest of 60 occurred for Brexit and the Trump Election, following the two large corrections in Aug 2015 and Jan 2016. -Harry
Sir Harry
I cannot see the co relation with this ratio
Gold over Inverse of SPX ? ( Both should be moving in the same direction generally
Thats getting pretty exotic eh ?
What about simply Gold :SPX
Definitely exotic!
I got the idea for $GOLD:$VIX from a Goldtenter who posted a chart of $VIX:$VXV as a “bottom caller” ratio for the stock markets, way back in early 2016.
More of a tool to buy the big dips for long term, passive index fund holders. Strategy was to buy the dip when VIX:VXV soared and stopped at a historical resistance line. For $GOLD:$VIX, a strategy could be to buy the dip when the ratio falls towards a historical support line like 40. VXV, the 3 month VIX, or GOLD can be used as a benchmark to better visualize local maxima for VIX and better moments to buy the dip during larger corrections.
I guess one way to interpret this is to suggest that the big “buy the dip” opportunity for long term passive holders is over (for now).