Posts filed under “Technical Analysis”

Dow Jones/Gold Relative Ratio, Annual Data from 1896

This chart from technician John Roque shows periods of Dow/Gold ratio. The first two bold blue lines highlight the 14-year periods when gold outperformed the DJIA (1928-1942 and 1965–1979). The current third bold line shows that gold has been outperforming the DJIA since 1999 – implying we are ½ way through this cycle.
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DJIA / Gold Relative Ratio, Annual Data from 1896

Djia_gold_relative_ratio

Source: Natexis Bleichroeder
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Roque notes that the long term average for this ratio is 9.5 and as of March 31, its 18.9. The current cycle could run to ~2013 or until this ratio gets down to the single digits like. Either way it looks like gold (and commodities) have further to go.

I should have more on this in a related research project in a few weeks . . .

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Quote of the Day:

“English stocks are springing up like mushrooms this year, forced up to a quite unreasonable level, and then, for the most part, collapse. In this way, I have made over 400 pounds. [Speculating] makes small demands on one’s time, and it’s worthwhile running some risks in order to relive the enemy of his money.”

Karl Marx (from 1864 letter to his uncle)

Note: this info was emailed to clients on April 18, ~noon

Category: Commodities, Investing, Markets, Technical Analysis

YTD Charts: NDX, SPX, Nasdaq, Dow, Russell 2000

Category: Investing, Markets, Technical Analysis

Sell Off on Light Volume

Category: Markets, Psychology, Technical Analysis, Trading

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Category: Markets, Politics, Technical Analysis

Chart of the Week: First Q 4% Year End Performance

Category: Markets, Technical Analysis

Mid-East Stock Slide

Category: Markets, Psychology, Technical Analysis

Barron’s: Buh-bye to Citibank Panic Euphoria Measure?

Category: Financial Press, Markets, Psychology, Technical Analysis

Relative Outperformance: Low Quality Stocks

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Nasdaq Volume Decreasing

Category: Markets, Technical Analysis

The Single Company Magazine Cover Indicator

In the past, I have warned against relying on the magazine cover indicator for specific companies. There are some very specific caveats on this here. The reason for this is that, in my experience, the Cover Indicator is useful for determining when large social phenomena are reaching an emotional crescendo. Oftentimes, emotions take over at…Read More

Category: Apprenticed Investor, Psychology, Technical Analysis