Stock Market / Gold Ratio Rebounds to Key Level
An index we keep of the total value of the stock market divided by the price of gold has rebounded to the level that we saw at the October 10, 2008 stock market price momentum low. After that momentum low the stock market went down to make the price low on March 6, 2009.
The ratio first hit the key rebound level on May 4, 2009 and since that time gold has outpaced the stock market rise creating a flattening of the ratio, a harbinger of two possibilities, gold could rally dramatically from here, or gold could die here and the stock market will chase it lower as deflation factors unfold. We lean to the later possibility.
Today we have a repeat of the Ben and Alan show, the bubble creator and the wanna be bubble creator are both speaking today, different times, different places. It should be interesting to watch. Which one will tell the truth? This will be a trading day you will not want to miss.
The EMA ETF Fund Nav was 1129 at yesterdays close.
7:36 AM CDT