IvanLabrie
Short

Gold/Stocks ratio: Time to short Gold and Long S&P500 soon

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Many people will think this post is insanity, but I'm simply revisiting, and zooming on a very interesting setup I had detected some time ago.
This is a ratio chart of the S&P500             index compared to Gold             . The risk off sentiment is reaching a very vivid extreme here, and like anything else, it trends with Time at Mode concepts.
I'm interested in monitoring it since we're very close to a projected target for it, and also, close to the time expiration of the last uptrend signal.

If we see a drastic turn once either (or both) targets are hit (time/price), we might be able to capture a great long term entry in this ratio.

Refer to related ideas for the monthly view.

Cheers,

Ivan Labrie.
Comment: Two days left, target not hit yet.
Comment: Nice turn so far.
Comment: Target hit, one day left.
Comment: Right on the last day, we see a turn...I think this is it.
Comment: A break under yesterday's low would seal the deal.
Comment: Let's see how this one progresses. I hope people managed to catch the trade, the idea was to buy S&P500 and sell Gold, or buy S&P500 with gold if you had longs.
Currently a profitable trade. (same as buying oil with gold, which I did take myself)
Comment: Two new lows...the deal is sealed.
Comment: Anyone took this pair trade or the oil/gold one?
Comment: This and oil/gold are acting great as pair trades. Not a bad idea to hold the pair setups.
I'm flat atm, on those, but I am in correlated trades.
Comment: Trendline about to break down.
Comment: Trendline held for now.
Comment: Trendline finally crossed...now if we close below it, this is a big deal!
Comment: Closed below, now retesting, pay attention, gold might be a short.
Comment: Time to monitor this ratio closely. I suspect the market is turning down here, if you trace a trendline you might get some timely warnings here.

snapshot
Comment:
snapshot
Comment: This ratio keeps telling you when to long gold...now is the time.
Good work Ivan interesting chart. As you said a turn at projected target could add weight to a price reversal pattern. You could also assume a continuation pattern at this level would be important for a break out. Ive been looking at some longs for gold stocks on the ASX as many seem to have bottomed or in a phase 1 accumulation base and the majors which mimic ASX200 looking like they have been in distribution started rolling over. Ill keep an eye on this chart , cheers.
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It's a very interesting scenario.
The sentiment is palpable, but the bottom can take some time to form.
I almost never use trendlines but look at how good they work with ratio charts. (tip from Tim West)
I'd wait for confirmation here, before jumping on the short side.
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Totally agree with you mate, awesome, All the BEST from me :)
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i think its possible that this pair can go up till 1250 then break downwards or already reached the peak if it doesn't pass the 1170
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jaejames jaejames
opps wrong pair :D i thought its xauusd
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Yes, this is a ratio chart of gold vs S&P500.
I'll use it to track how the fear progresses.
It can be a very nice trade, it tends to trend nicely, if you long stocks and short gold.
You can also always keep some gold longs in your portfolio, and manage positions scaling in and out on rallies and declines. (but that's another topic).
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jaejames IvanLabrie