It is very preliminary, but the Copper/Gold ratio is making the slightest hint that a bounce could be coming within this downtrending market ratio. That could signal that the latter stages of the rally could rotate to favor or at least include commodities and cyclical items along with stocks.
RSI and MACD are coiled for a bounce. As for a target, and assuming it would only be an interim bounce within the downtrend, the target would be the daily SMA 200 (orange line).
Nothing goes straight up or down, and that would include the Cu/Au ratio. I am going to continue to view the current macro as a bear market rally. But if Cu/Au were to bounce the rally’s participation could fan out to commodity/inflation trade areas.
It’s only one indicator, but it’s an important forward looker. The forward view is disinflationary and counter-cyclical. The interim view could be a little relief valve in the making. Again, as of now it’s very preliminary. But Cu/Au has a look about it as if it may want to bounce.
