Dow Gold Ratio - DJIA vs GLD

Dow Gold Ratio Approaching 20-Year Lows. With the price of gold ($1,246.00) just below its recent all time high,  the DOW:Gold ratio is approaching 20 year lows. 

At 8.40, the Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 19.5% from its 17-year March 6th, 2009 low of 7.03. 

Despite good gains for the DOW since March 2009, the DOW-Gold ratio remains  just above its  March low and 81% below its 1999 peak of 44.77.

• Gold quote and charts
• DJIA Charts & Quote

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999 at nearly 45.

 (Click Charts for full size images)

Gold - Continuous Contract (EOD) ($GOLD) DAILY bars

Day   Date        Close
=== =========== ==========
Fri 10-Sep-2010 1246.2000
Thu 09-Sep-2010 1243.8000
Wed 08-Sep-2010 1255.1000
Tue 07-Sep-2010 1255.5000
Fri 03-Sep-2010 1247.0000
Thu 02-Sep-2010 1251.2000
...

Fri 18-Jun-2010 1256.6000 

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took nearly 45 ounces of gold to buy the DJIA.
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
• As of Friday (September 10, 2010) it only takes 8.40 ounces of gold to buy the DOW
• Gold quote and charts

All time Lows:

The DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.

chart courtesy of www.sharelynx.com (Click for full size image)

With the DOW:Gold ratio now at 8.40, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.  

The Top 10-year CD rate is 3.25% at Discover Bank which compares well with the 10-yr US Treasury with a current yield of 2.77%.  For more information, see:

• US Treasury Rates at a Glance (charts)
  
• US Treasury Rate Quotes
• LIBOR Rates at a Glance

Disclosure: I own a very small amount of gold hidden in the house for bribes if we see Armageddon. For income plus inflation protection, I own and recommend in my newsletters TIPS, TIPS mutual funds and Series iBonds.

For more information, see:

• Kirk's Two Investment Letters
• Series I Bonds Explained (iBonds)
• TIPS Mutual Fund (VIPSX)

Question: Which way do you think the DOW-Gold ratio is headed?

DOW Gold Ratio with Gold at All Time High

Despite gold at an all time high over $1,230 per ounce, the current Dow to Gold Ratio is closer to its resistance level than its support level shown on my graph below.

At 8.72, the Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 24% from its  March 6th low of 7.03. Despite that impressive gain, the DOW-Gold ratio is currently 80.5% below its 1999 peak of 44.77.

• Gold quote and charts
  
• DJIA Charts & Quote

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999 at nearly 45.

chart courtesy of stockcharts.com (Click for full size image)

The markets, measured by the S&P500 (S&P500 Charts) and DIJA, may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took nearly 45 ounces of gold to buy the DJIA.
  
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
  
• As of today (May 11, 2010) it only takes 8.72 ounces of gold to buy the DOW
  
• Gold quote and charts

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.

chart courtesy of www.sharelynx.com (Click for full size image)

One way to get inflation protection without buying gold is with Series I-Bonds.   Currently new iBonds pay 1.74% which combines their 0.2% base rate plus 1.54% for annualized inflation.   For details, see:

• Series iBonds
  and
• Rates for older Series I Bonds

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

Disclosure: I own a very small amount of gold hidden in the house for bribes if we see Armageddon. For income plus inflation protection, I own and recommend in my newsletters TIPS, TIPS mutual funds and Series iBonds.

For more information, see:

• Kirk's Two Investment Letters
  
• Series I Bonds Explained (iBonds)
  
• TIPS Mutual Fund (VIPSX)
• US Treasury Rates at a Glance (charts)
  
• US Treasury Rate Quotes
  
• LIBOR Rates at a Glance

Question: Which way do you think the DOW-Gold ratio is headed?

Please post your answer here

DOW Gold Ratio Remains in Downtrend

At 9.17, the Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 30.4% from its 17-year March 6th low of 7.03. Despite that impressive gain, the DOW-Gold ratio remains 79.5% below its 1999 peak of 44.77.

• Gold quote and charts
  
  
• DJIA Charts & Quote

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999 at nearly 45.

chart courtesy of www.sharelynx.com (Click for full size image)

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took nearly 45 ounces of gold to buy the DJIA.
  
  
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
  
  
• As of today (March 2, 2010) it only takes 9.17 ounces of gold to buy the DOW
  
  
• Gold quote and charts
  

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.

chart courtesy of www.sharelynx.com (Click for full size image)

With the DOW:Gold ratio now at 9.17, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• US Treasury Rates at a Glance (charts)
  
  
• US Treasury Rate Quotes
  
  
• LIBOR Rates at a Glance

Disclosure: I own a very small amount of gold hidden in the house for bribes if we see Armageddon. For income plus inflation protection, I own and recommend in my newsletters TIPS, TIPS mutual funds and Series iBonds.

For more information, see:

• Kirk's Two Investment Letters
  
  
• Series I Bonds Explained (iBonds)
  
  
• TIPS Mutual Fund (VIPSX)

Question: Which way do you think the DOW-Gold ratio is headed?

DOW Gold Ratio at 9.39

At 9.39, the Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 33.6% from its 17-year March 6th low of 7.03. Despite that impressive gain, the DOW-Gold ratio remains 79% below its 1999 peak of 44.77. See:

• Gold quote and charts
  
  
• DJIA Charts & Quote

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

lick chart courtesy of stockcharts.com for full size image

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
  
  
• As of Friday (December 11, 2009) it only took 9.39 ounces of gold to buy the DOW
  
  
• Gold quote and charts
  

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.

chart courtesy of www.sharelynx.com (Click for full size image)

With the DOW:Gold ratio now at 9.66, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• US Treasury Rates at a Glance
  
  
• LIBOR Rates at a Glance

Disclosure: I own a very small amount of gold hidden in the house for bribes if we see Armageddon. For real inflation protection, I own and recommend in my newsletters TIPS, TIPS mutual funds and Series iBonds.

For more information, see:

• Kirk's Two Investment Letters
• Series I Bonds Explained (iBonds)
• TIPS Mutual Fund (VIPSX)

Question: Which way do you think the DOW-Gold ratio is headed?

Post your answer HERE.

Jim Rogers On Dollar, Gold, Stocks, Sterling and More

Jim Rogers was a guest on CNBC's Closing Bell with Maria Bartiromo today.

On the Dollar, Rogers said:

• the Federal Reserve has run out of bullets and we don't have enough trees to print any more money.
• the dollar will probably have a short-term rally just because everyone is so bearish on it now.
  

On gold (Gold charts and GLD charts), Rogers said:

• Gold will reach $2,000 per ounce by 2019, about 6% a year gain.
• Gold's recent surge (to $1,351.50 Current Gold Quote) is due to large budget deficits
• Gold will power the great commodities run that he thinks will last for the next decade.

General comments by Jim Rogers.

Rogers has correctly been bullish on commodities over stocks for the past decade.

Rogers would rather own agriculture, silver or palladium over gold or copper since silver is still 70% below its all-time high.

Become a farmer. Learn to drive a tractor. We have a shortage of farmers.

Water is a spectacular opportunity.

He is skeptical of the economy going forward and the US market is up 70% so he'd not put money into US stocks. If the economy recovers, he feels his commodities will go up anyway.

He is not buying any stocks because they are all going up but he still owns some stocks in China.

"China churns out 15 or 20 times as many engineers as we do, every year." What Jim fails to mention is many of those "engineers" might be auto mechanics and other technicians here because they are not all design engineers. Still, even twice as many design engineers is a big deal and I think the rate is much higher.

What to avoid according to Rogers:

Jim says to avoid US Long-term US Treasury Bonds. He sees it as the next bubble since "everyone" is buying US government bonds. (except for me. I sold ALL my bonds and bond funds that are not indexed to inflation in my personal accounts and the portfolios I cover in "Kirk Lindstrom's Investment Letter.")

Jim sold all his British Sterling after holding it for 30 years. Jim said "it grieves me to see what is happening in the UK."

As of December 10, 2009, "Kirk's Newsletter Explore Portfolio" is up 32.4% YTD vs. DJIA up 18.7% YTD
(More info - Free Sample Issue)

Subscribe NOW and get the December 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

Past Jim Rogers articles of note:

• April 2009: Rally will fail.
  Jimmy Rogers comments on the bailout of Wall Street and his belief that we made a bottom but it is not the final bottom.
  
  
• March 2009: Jim Rogers Bearish, Likes Land on Larry Kudlow's "The Kudlow Report"
  "I don't think the bottom is here, maybe 'a' bottom, but not 'the' bottom. The economy is going to get worse. You can't have a good stock market without a good economy."
  
  
• November 2008: Jim Rogers Covers Shorts
  When asked where to invest, Rogers said China. He admitted he did not take any profits in China before the crash but thinks investing in China now is like investing in the US 100 years ago.
  

Nouriel Roubini Gold & Stock Market Outlook

Not only is Nouriel Roubini, called "Dr. Doom" by many, a stock market bear, he is bearish on gold. Gold (Gold quote & Charts) is currently trading at $1123 per ounce.

"I don't believe in gold," Roubini told CNBC. "Gold can go up for only two reasons."

"[the first is] inflation, and we are in a world where there are massive amounts of deflation because of a glut of capacity, and demand is weak, and there's slack in the labor markets with unemployment above 10 percent in all the advanced economies. So there's no inflation, and there's not going to be for the time being.”

Kirk's Comment: The price of Gold is probably predicting the future out to 10 years or more much as the very low PE ratios for banking and home builders in 2006 and early 2007 predicted the financial meltdown years before it happened. Even today, stocks like Verizon and AT&T have very high dividends with low PE ratios which tells me the market expects communication bandwidth to eventually become a commodity. Low PE ratios and high dividends often say more about the long-term future than the present just as the current high price for gold may be telegraphing the future unless we get our spending under control in the US.

In simpler terms, the price of gold is predicting we will need wheelbarrows to pay interest on our national debt if congress and the white house don't change their spending ways quickly.

The second way gold can go higher in this deflationary economy, according to Roubini, is a financial Armageddon. Roubini says we've avoided that risk.

Kirk's Comment: Have we? If US Treasury interest rates eventually soar to attract money to finance our huge debt, we'll have to borrow even more money to repay the debt. With the democrats and Republicans both spending more than we take in as fast as they can, the price of gold may be predicting a different, but very real financial Armageddon.

Roubini said gold can't move up 20% to 30% unless we end up in a world of inflation or another depression.

“So all the gold bugs who say gold is going to go to $1,500, $2,000, they're just speaking nonsense."

click for full size image from stockcharts.com

Nouriel Roubini is a professor at the Stern Business School at New York University, chairman of Roubini Global Economics and a weekly columnist for Forbes magazine.

Current Quotes (click for current quote and chart):

• Gold (quote & charts)at $1,123
  
  
• S&P500 at 1,103.66
  

My prior updates on Dr. Doom:

• July 16, 2009: Nouriel Roubini, Dr. Doom, Still Gloomy
  
  
• March 09, 2009: Nouriel Roubini, Dr Doom, Thinks DOW 5,000 is Possible

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 157% (a double plus another 57%!!) vs. the S&P500 UP at tiny 7.3% vs. NASDAQ UP at tiny 0.3% (All through 12/10/09)

As of December 10, 2009, "Kirk's Newsletter Explore Portfolio" is up 32.4% YTD vs. DJIA up 18.7% YTD
(More info - Free Sample Issue)

Subscribe NOW and get the December 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

Disclaimer: I have no position in Gold but I do have significant personal positions in TIPS, TIPS mutual funds and iBonds plus I hold them in my newsletter portfolios.

DOW Gold Ratio at 9.66

The Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 37% from its 17-year March 6th low of 7.03. (Gold quote and charts) Despite that impressive gain, the DOW-Gold ratio remains 78% below its 1999 peak of 44.77.

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
  
  
• As of Friday (September 11, 2009) it only took 9.66 ounces of gold to buy the DOW
  
  
• Gold quote and charts
  

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

Which way do you think the DOW-Gold ratio is headed?

Post your answer here

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 144% (a double plus another 44% !) vs. the S&P500 UP at tiny 2.5% vs. NASDAQ down 3.2% (All through 9/30/09)

(More Info & FREE Sample Issue)

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.

chart courtesy of www.sharelynx.com (Click for full size image)

With the DOW:Gold ratio now at 9.66, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• Gold quote and charts
  
  
• US Treasury Rates at a Glance
  
  
• LIBOR Rates at a Glance

As of September 30, 2009, "Kirk's Newsletter Explore Portfolio" is up 25.8% YTD vs. DJIA up 10.7% YTD

Subscribe NOW and get the September 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

The DOW Measured in Ounces of Gold Up 39% From Recent 17-Year Low

The Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 39% from its 17-year March 6th low of 7.03. Despite that impressive gain, the DOW-Gold ratio remains 78% below its 1999 peak of 44.77.

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold.

When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have reached new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
  
  
• As of Friday (August 7, 2009) it only took 9.80 ounces of gold to buy the DOW, a nice jump from the recent low.
  

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

With fiscal irresponsibility in Washington DC as well as many states such as California, many people believe we will have hyper inflation in the future that could give us a DOW-to-Gold ratio near 1.0 again.

Which way do you think the DOW-Gold ratio is headed?

Post your answer here.

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.

Click chart courtesy of www.sharelynx.com for full size image

With the DOW:Gold ratio now at 9.80, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• US Treasury Rates at a Glance
  
  
• LIBOR Rates at a Glance

As of August 9, 2009, "Kirk's Newsletter Explore Portfolio" is up 15.9% YTD vs. DJIA up 6.8% YTD.

(More Info & FREE Sample Issue)

HURRY! Subscribe NOW and get the August 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

The DOW Measured in Ounces of Gold Up 33% From Recent 17-Year Low

The Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 33% from its 17-year March 6th low of 7.03. Despite that impressive gain, the DOW-Gold ratio remains 79% below its 1999 peak of 44.77.

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03
  
  
• As of Friday (May 9, 2009) it only took 9.36 ounces of gold to buy the DOW, a nice jump from the recent low.
  

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

Which way do you think the DOW-Gold ratio is headed? Post your answer here.

Since 12/31/98 through 5/8/09 "Kirk's Newsletter Explore Portfolio" is UP 107% (over a double!) vs. the S&P500 DOWN 11% . Subscribe NOW and get the May 2009 Issue for FREE!

The DOW/Gold ratio broke out of the "symmetrical triangle" pattern, explained below, when we entered our first recession and the markets were in the March 2000 to October 2002 bear market.

The good news is the chart shows the DOW:Gold ratio is very over sold.

This 200 Year Dow/Gold Chart courtesy of www.sharelynx.com (Click for full size image) shows the DOW/Gold ratio from 1800 through August 2008.


With the DOW:Gold ratio now at 9.36, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• US Treasury Rates at a Glance
  
  
• LIBOR Rates at a Glance

More on "Symetrical Triangle" chart patterns: The Bible for technical analysis, Technical Analysis of Stock Trends, by Robert Edwards and John Magee, says about 75% of symmetrical triangles are continuation patterns and the rest mark reversals. This book makes a great Gift!

The "return to the apex" of the Gold/DOW ratio in late 2001, early 2002 confirmed the technical breakdown of this chart pattern.

Post & Read Comments Here

Since 12/31/98 through 5/8/09 "Kirk's Newsletter Explore Portfolio" is UP 107% (over a double!) vs. the S&P500 DOWN 11% . Subscribe NOW and get the May 2009 Issue for FREE!

Dow to Gold Ratio Chart Continues Plunge: DJIA Priced in Ounces of GOLD

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the 30 stocks in the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• Yesterday it only took 7.58 ounces of gold to buy the DOW!

The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

The DOW/Gold ratio broke out of the "symmetrical triangle" pattern, explained below, when we entered our first recession and the markets were in the March 2000 to October 2002 bear market.

The good news is the chart shows the DOW:Gold ratio is very over sold.

This 200 Year Dow/Gold Chart courtesy of www.sharelynx.com (Click for full size image) shows the DOW/Gold ratio from 1800 through August 2008.


With the DOW:Gold ratio now at 7.58, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• US Treasury Rates at a Glance
  
  
• LIBOR Rates at a Glance

More on "Symetrical Triangle" chart patterns: The Bible for technical analysis, Technical Analysis of Stock Trends, by Robert Edwards and John Magee, says about 75% of symmetrical triangles are continuation patterns and the rest mark reversals. This book makes a great Gift!

The "return to the apex" of the Gold/DOW ratio in late 2001, early 2002 confirmed the technical breakdown of this chart pattern.

DJIA Priced in Ounces of GOLD: The Secular Bear Market Continues

When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

A chart of the DOW Jones Industrial Average (DJIA Charts) priced in gold shows the markets are not as healthy as one might think due to the decline of the US dollar.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• Today it only takes 10.31 ounces of gold to buy the DOW!

The good news is the chart shows the DOW:Gold ratio is very over sold.

Cutting the Fed Funds target rate from 6.50% in January 2001 to 1.0% in June 2003 may have inflated the US stock market out of its March 2000 to October 2002 bear market when priced in dollars but it had consequences. These consequences include causing the housing bubble whose collapse has made things worse today as major US banks have failed in the past year. Skyrocketing commodity prices may have pushed us into a global recession also.

Now the Fed has cut the Fed Funds rate to a rage of zero to 0.25%. This could cause another inflationary bubble somewhere if the Fed succeeds in preventing a deflationary depression by its actions. I added significantly to my favorite TIPS (Treasury Inflation Protected Security) fund (Charts of VIPSX TIPS Fund) recently when the base rates were over 3.0%:

Date	5 yr	10 yr	20 yr	30 yr
	TIPS	TIPS	TIPS	TIPS
10/4/08	1.60	2.16	2.45	2.42
10/11/08	2.46	2.96	2.97	2.94
10/18/08	2.52	2.86	2.88	2.83
10/25/08	2.92	2.98	3.02	2.98
11/1/08	2.80	3.13	3.34	3.31
11/8/08	2.18	2.71	2.97	3.17
11/15/08	2.42	2.86	2.8	2.79
11/22/08	2.50	3.01	3.03	3.05

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:

• US Treasury Rates at a Glance
  
  
• LIBOR Rates at a Glance

More on "Symetrical Triangle" chart patterns: The Bible for technical analysis, Technical Analysis of Stock Trends, by Robert Edwards and John Magee, says about 75% of symmetrical triangles are continuation patterns and the rest mark reversals. This book makes a great Gift!

The "return to the apex" of the Gold/DOW ratio in late 2001, early 2002 confirmed the technical breakdown of this chart pattern.

For more information, read chapter eight "Important Reversal Patterns - The Triangles."

Click the flag pictures to see



Major World Market Graphs At A Glance: Daily 5 Days 1 Yr

DOW Priced in Ounces of GOLD: A Secular Bear Market!

When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

A chart of the DOW Jones Industrial Average (DJIA Charts) priced in gold shows the markets are not as healthy as one might think due to the decline of the US dollar.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• Today it only takes 12.21 ounces of gold to buy the DOW!

The good news is the DOW priced in gold just bounced off support with gold falling faster than stocks. The news about the markets could not get much worse so perhaps we'll get lucky and have a triple bottom for the DOW:Gold chart and see the market rally in anticipation of better times in 2009.

Cutting the Fed Funds target rate from 6.50% in January 2001 to 1.0% in June 2003 may have inflated the US stock market out of its bear market when priced in dollars but it had consequences that we are feeling today.

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms. You can get 5% CDs with 12 and 13-month terms at Washington Mutual - WaMu (now owned by JP Morgan Chase) with an online CD . You can also get a one year CD paying 4.25% at Wachovia Bank (now owned by Citibank.)

Cutting interest rates to get the US out of the 2001 recession may have worked but the inflation in commodities and devaluation of the US dollar it caused has caused pain for the US consumer. This pain is often blamed on president Bush who took office just as the DOW/Gold ratio broke out of the "symmetrical triangle" pattern , shown above in blue and explained below.

More on "Symetrical Triangle" chart patterns: The Bible for technical analysis, Technical Analysis of Stock Trends, by Robert Edwards and John Magee, says about 75% of symmetrical triangles are continuation patterns and the rest mark reversals. This book makes a great Gift!

The "return to the apex" of the Gold/DOW ratio in late 2001, early 2002 confirmed the technical breakdown of this chart pattern.

For more information, read chapter eight "Important Reversal Patterns - The Triangles."

Click the flag pictures to see



Major World Market Graphs At A Glance: Daily 5 Days 1 Yr

DOW Priced in Ounces of GOLD: A Secular Bear Market!

When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

A chart of the DOW Jones Industrial Average (DJIA Charts) priced in gold shows the markets are not as healthy as one might think due to the decline of the US dollar.

• Back in 1999, it took 45 ounces of gold to buy the DJIA.
  
  
• Today it only takes 12.33 ounces of gold to buy the DOW!

Cutting the Fed Funds target rate from 6.50% in January 2001 to 1.0% in June 2003 may have inflated the US stock market out of its bear market when priced in dollars but it had consequences that we are feeling today.

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms. You can get over 5% at Discover Bank if you are willing to tie your money up for five years. You can get a one year CD paying 4.25% at Wachovia Bank.

Cutting interest rates to get the US out of a recession may have worked but the inflation in commodities and devaluation of the US dollar it caused has caused pain for the US consumer. This pain is often blamed on president Bush who took office just as the DOW/Gold ratio broke out of the "symmetrical triangle" pattern, explained below.

More Dow/Gold Charts courtesy of www.golddrivers.com and www.sharelynx.com (Click for full size images)



With the DOW:Gold ratio now at 12.44, it is trading near the bottom of the green zone in the second chart.

Chart of the Day observed:

"It is also interesting to note that the magnitude of the current bear market (when adjusted for inflation) is approximately 60% of what occurred during the dot-com bust of 1999 to 2003."

Gold:Oil Ratio:

This last chart of the Gold/Oil ratio shows how many barrels of oil an ounce of gold will buy.

Both are international commodities. This ratio tends to cancel out the US dollar as both gold and oil are priced in US Dollars.


More on "Symetrical Triangle" chart patterns:The Bible for technical analysis, Technical Analysis of Stock Trends, by Robert Edwards and John Magee, says about 75% of symmetrical triangles are continuation patterns and the rest mark reversals. This book makes a great Father's Day Gift!

The "return to the apex" of the Gold/DOW ratio in late 2001, early 2002 confirmed the technical breakdown of this chart pattern.

For more information, read chapter eight "Important Reversal Patterns - The Triangles."

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Click the flag pictures to see



Major World Market Graphs At A Glance: Daily 5 Days 1 Yr