Two weeks ago we looked at the ratio of the S&P 500 (SPY) to Gold (GLD) and saw that potential for a continuation of the flow in SPY's direction looked like this. After a brief pause, the consolidation of the break of the ascending triangle is playing out, and it is moving toward the target of 0.163 from the breakout level of 0.1345, a 21% move.
But that is only part of the story. If you step back from the tight picture examined then and look at the broader picture, below, you will notice that the triangle came in the midst of an uptrend. This brings yet another target higher for the ratio, considering the run from 0.080 to 0.130 into the triangle.
Looking at the AB=CD pattern targets a move higher in the ratio to 0.165. Those of you that follow my work will understand that this is exciting to me. There are two separate technical analysis methods that both result in a similar target for the ratio of the S&P 500 to Gold. As a reminder, this could occur as a move to 2125 in the S&P 500 or 1080 in Gold, or some piece of that for each. Keep selling that Gold for Equities.