The SPX/ Gold ratio appears to be signaling that a near-term bounce may be in order for equity markets, potentially accompanied with relative weakness in gold.
As you can see there is a very clear gap within the ratio that is yet to be filled, the gap is present at approximately 2.00, in other words, the points of the SPX will need to be twice the price of spot gold in order to fill this gap.
The outlined boxes are what i consider to be the most likely way in which this gap can be filled at press time.
A rally in the SPX to approximately the 50% fib level at $2,900, and a corresponding weakness in spot gold to around $1,450
It is worth mentioning, the specific prices at which this gap is filled is not really important, what i am looking for is a gap fill within this ratio at which point i will look at going short on equities and going long on gold. As i believe that further weakness in equities is highly likely going forward, barring news of containment measures succeeding in containing the spread of the Coronavirus, or news of a ready cure for the illness.
* At press time the SPX futures are down approximately 3.7% and may very well hit limit down again, with Russell 200 futures flirting with 4.75% down and Nasdaq futures down 4.4%.
** What i am looking for, is a bounce in equities, coupled with relative weakness in gold, the prices at which this occur are more of an exercise in bottom fishing.
-TradingEdge
As you can see there is a very clear gap within the ratio that is yet to be filled, the gap is present at approximately 2.00, in other words, the points of the SPX will need to be twice the price of spot gold in order to fill this gap.
The outlined boxes are what i consider to be the most likely way in which this gap can be filled at press time.
A rally in the SPX to approximately the 50% fib level at $2,900, and a corresponding weakness in spot gold to around $1,450
It is worth mentioning, the specific prices at which this gap is filled is not really important, what i am looking for is a gap fill within this ratio at which point i will look at going short on equities and going long on gold. As i believe that further weakness in equities is highly likely going forward, barring news of containment measures succeeding in containing the spread of the Coronavirus, or news of a ready cure for the illness.
* At press time the SPX futures are down approximately 3.7% and may very well hit limit down again, with Russell 200 futures flirting with 4.75% down and Nasdaq futures down 4.4%.
** What i am looking for, is a bounce in equities, coupled with relative weakness in gold, the prices at which this occur are more of an exercise in bottom fishing.
-TradingEdge
