GLD/SPY Ratio At 1.0, Been Swing Dancing, When Will Spread Widen and Which Direction

If you look at the GLD/SPY ratio it is at 1.00.  At some point the spread has to widen no?  Or GLD and SPY will be joined at the hip because of a lower $USD (real return).  Look at GLD/SPY charts on multiple time frames with trends and moving averages.

1) The GLD:SPY 1 year chart is in a triangle and near an inflection point, just above the 50 and 200dma.  The GLD has been swing dancing with SPY in a 0.20 range since April, 2009.


2)  The GLD:SPY 3 Year chart is in a long term uptrend but is being squeezed in a symmetrical triangle.  If GLD falls hard, SPY spikes or simply SPY outperforms GLD to the upside / GLD falls harder than SPY on the downside, the ratio could test the August, 2009 bottom at 0.90 (also near uptrend support).  Or GLD/SPY breaks out to upside...  The GLD:SPY Ratio is up 10 fold since the beginning of the recession.  I will look at gold, silver, US Dollar and S&P 500 specifically in next post.  Thoughts?


Charts courtesy of Stockcharts.com

Comments

  1. Looks like we're in for the usual false break followed by a strong and sustained reversal the other direction, and ground zero is two weeks or less away.

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  2. OK, ratio is in trend, now reverse it for next period and invest in this what normally you would never do. In futures! Then return to high yielding bonds. Then buy for one third of the profit, the stocks. Short SPDR and long ETF. Wait a little and sell all. Then buy MBS, CDS and CBO. Wait for KIRS spike and sell all and put on saving.

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