without_worries

Dow Jones/Gold death cross - Risk is on!

This idea is going to seem counterintuitive as everything is super bearish , fear is everywhere and a monster recession is coming. While a recession is on the way, I’m leaning towards later in 2023.

Why risk on?

On the above 2-day chart a ratio is shown with the Dow Jones industrial average index divided by spot gold price action. This ratio is a fantastic indicator of when to be risk on / risk off in the market.

Currently the ratio is printing a 2-day death cross (orange circle). That is the 2-day/50-day SMA has crossed down the 2-day/ 200-day SMA AND price action is below the 2-day/ 200-day SMA . When this happens it is an indication smart money is going ‘risk on’ into the market. Retail is usually doing the exact opposite, but that’s what they like.

Looking left at previous death crosses (charts below):

August 2019 death cross was a fantastic opportunity to go risk on with returns in both the stock market and crypto currencies at 60% and 600%, respectively.

April 2016 was the same story, 3000% and 60% for crypto currencies and stocks on average.

In fact even buying in at the death cross before the 2007 credit crunch might seem disastrous, however you’d have bought the S&P 500 at 1500 points.

For the cross of May 2022 I’m forecasting targets of:

Bitcoin to $66k

S&P 500 to 6500 points.

Looking left is looking great.

Ww

PS: when all this is over, if you see those returns.. be long in the shiny metals. Now is not the moment.


August 2019 2-day death




April 2016 2-day death cross


BTC
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Allow 3-6 months on ideas. Not investment advice. DYOR