The ratios of gold to stocks (SPX) and the miners to stocks (SPY) are still intact to the rally theme.
There are of course macro and sector fundamentals and nominal chart technicals to consider. But one aspect of the ongoing rally view that is important as well are the simple ratios of gold vs. stocks and the miners vs. those same stocks as well. Folks, if the precious metals are not performing in relation to stocks, you can forget about a sustainable positive view.
We have previously noted the bullish looking bottoming pattern in the Gold/SPX ratio, and its right side is still climbing the 50 day moving average, which it is attempting to turn up. It’s a lull in the precious metals market right now, but these goings on inside the market are important. Still looking good.
Similarly, the GDX/SPY ratio is holding serve after being under pressure the last few days. It would be preferable for GDX/SPY to hold the SMA 50 here (green arrow), but it could also fill that gap up on September 12. We’d want a higher high to be put in there.
Just a quick snapshot of one internal picture.
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