See, here is Amigo #1 (SPX/Gold ratio) on the left, having such a great time he’s riding one-handed and with his eyes closed. Ye ha! Looks like someone’s about to join his fellow Amigo (#2), who did exactly as we’d projected and stopped at the Continuum’s limiter (100 mo. EMA on the 30yr bond yield), at least temporarily. The dull one on the far right (the Yield Curve Amigo) is the lone holdout.
Folks, please don’t interpret me the wrong way (i.e. a perma bear giving the latest in a string of warnings). We, not the dumb money driving the SPX… but we, NFTRH plotted out a top-test for the market months ago when the dumb money was actually very frightened money. Indeed, that is the main reason we needed a top-test.
So that said, I am here to tell you that speculation in the US stock market as measured against an asset of stable value is on a momo drive.
SPY/GLD daily is wildly overbought with the renewed spirits of market participants.
SPY/GLD weekly is wildly overbought and its pattern measures to around 2.50.
SPY/GLD monthly is also overbought, but that didn’t stop it from continuing higher after the 2015-2016 market top (that wasn’t). As a side note, SPY/GLD out performs SPX/Gold because SPY kicks out dividends and gold does nothing but sit on its ass. But the overbought situation is very similar with SPX/Gold as well.
So I tell you now that I am not in any hurry to get aggressive with the gold sector nor sell the stock market. But the above are pictures of risk, although I suspect that the forces driving risk higher are fairly clueless of it. It’s party time after all.
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