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Tuesday, December 04, 2012

DIA:GLD Ratio - Dow Gold Ratio

Yesterday I published an article at Seeking Alpha titled "Dow/Gold Ratio Remains Low On Historical Basis." One reader suggested I include dividends in the DOW chart.  This chart shows the ETFs for the DOW (DIA) and Gold (GLD) with dividends included.  

Quotes and Charts for Gold & GLD (the ETF for Gold)
Another reader thought the long term chart in my article titled "200 Years - Dow/Gold Ratio" could be improved on so he gave a link to a temporary chart in the comments section.  His chart added blue resistance and support lines for the period prior to the Federal Reserve Act of 1913 created the Fed and red resistance and support lines for after the Fed was created.  

The lower red line on his chart made the "gold bugs" very bullish case for gold.  Of course, there are many ways to connect stars in the sky to see figures, so I added lines that make a bullish case for stocks relative to gold. Here is the chart with my modifications:

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