S&P 500?

KUCH

I know it has been mentioned here previously. I do need some clarification. "When the S&P and gold price is equal, time to sell the yellow mental" But I'm thinking it's not the S&P, but when the DOW and gold price are equal?

Spooly

It's the Dow/Gold ratio, but the S&P/Gold would be better in my opinion.

derryb

Historically (since formation of the FED in 1913), when the price of gold is near the Dow Jones Industrial Average (1:1), we have witnessed a turn reversal in both the Dow and in Gold. A parity of 1:1 can be reached by either a falling DOW or a rising gold price but normally takes the form of both at the same time. As they approach 1:1 it becomes apparent from the chart that a sharp reversal in price movement is in order for both.

jmski52

Good chart, derryb. As long as they don't change the parameters for the chart components, it ought to hold true reasonably well.

Is there a chart around that has gold vs. farmland values?

Baley

the chart doesn't show the dow/gold ratio EVER getting to 1 (there was no DJIA in existence in the first half of the chart)

it looks like the ratio spends most of it's time in the green band; an excursion below 5 or above 35 would seem to indicate a strong reversal is due, probably because one or the other or both are in extreme mania or crash phase. (i.e early 1930's, late 1970's)

the slope of the long term trend line up should tell you something deep and interesting

cohodk

the slope of the long term trend line up should tell you something deep and interesting


Shhuuuusssssss.

jmski52

The question is: "was 1980 the trendline, or an outlier"?

To put that question into perspective, you have to determine what the debt level means to the dollar, and you also have to determine whether or not the failed derivatives residing on banks' balance sheets represent a sovereign debt default risk.

I honestly don't know the answers. Who does?