timwest

Gold/Stocks Ratio has massive 5-wave psychological moves

Long
GLD/DIA  
GLD/DIA  
18
I'm not saying these Elliott patterns are perfect, but it makes sense that "in general" it takes some massive waves for people to change their mind about something.

Using GLD for Gold and DIA (Dow Jones Industrials ) for stocks, you can see the last 10-years had some pretty massive moves. As with any chart where there is 100% change from the low to the high, you ought to consider making the chart into a Log Chart so that moves on the chart are equal in percentage.

For the avid Elliottician, these counts might not be perfect, but they have the "classic look" of an Elliott Wave 5-wave move. The 3rd wave extends in both cases and wave 4 is a triangle in each case. I don't know if many people even track this ratio as a measure of psychology of the two markets, but it looks to me that there are some points in time when you'd want to look at this chart and NOW is one of those times.

With gold holding ground while the rest of Russia's assets get decimated (stocks, currency, oil ), then it looks like there is something important going on here in Gold . Gold is showing relative strength both to Russia and to stocks.

It's time to watch this VERY CLOSELY here. Gold may be making the lowest-risk, largest potential long entry RIGHT HERE.

Tim

12/12/2014 4:59PM EST

Subscribe to my indicator package KEY HIDDEN LEVELS $10/mo or $100/year and join me in the trading room KEY HIDDEN LEVELS here at TradingView.com