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SOME PERSPECTIVE ON THE DOW IN GOLD

13 November 2010 by Chart of the day 6 Comments

By Chart of the day

For some perspective on the stock market, today’s chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes a mere eight ounces of gold to “buy the Dow.” This is considerably less (82% less) than the 44.8 ounces it took to buy the Dow back in 1999. While the actual Dow continues to make new post-financial crisis rally highs, the most recent rally that occurred in the Dow priced in gold is fairly similar to several bear market rallies that have occurred since late 1999. It is also of interest that the Dow / gold has often tested (and is currently testing) resistance (red line) of its accelerated downtrend but has failed to break through on each occasion.

Notes:
- Does the gold rally continue or is the party over? The answer may surprise you. Find out now with the exclusive & highly regarded charts of Chart of the Day Plus.

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Comments
  • Patrick

    There was a time when it only took one ounce. I’m sure that is the bulls ultimate target/dream/fantasy.

    11/13/2010 at 8:58 AM
  • can't find 9 Nov 09 CFTC's COT data

    It’s been an “exciting” week but…
    I can’t find the last COT report to fully enjoy it.
    Where could it be?
    I hope CFTC people haven’t suffered a hypoglycemic shock from Sugar’s 20% haircut.

    11/13/2010 at 10:40 AM
  • can't find 9 Nov 2010 CFTC's COT data

    Sorry, I meant last Tuesday (9 Nov 2010) COT.

    11/13/2010 at 10:41 AM
  • boatman

    going to 1 to 2 in this, the worst credit crisis to soveriegn crisis to currency crisis since ’29……….write it down.

    anyone really think the EUR gonna make it thru this?……if so——delusional

    pile on THEN if it doesn’t happen.

    6-8 yrs left in this bear.

    signed, up 95% in two years…..n not over yet.

    11/13/2010 at 12:28 PM
  • Bertram Klauke

    I think the party is over.
    The party is over in precious metals, in all commodities,in stocks, bonds ecept the US$ which will gain strenght.
    All real indicators are pointing to that.
    The main indicator is money. There is simply a shortage of money.

    so long

    Bertram

    11/13/2010 at 10:19 PM