Gold:Oil Ratio Update

In the ongoing quest to make sense of the tangled disaster called the stock market version 2008, here we go with one of the three must-watch charts in my humble little world. Gary calls it the gorfest, but we normal people (hehe) give it the long name of "the gold to oil ratio".

(click to enlarge)

What I see is a bit of calm on the horizon for the ratio, and that would be no bad thing. The RSI is coming off one of its intermittent overbot peaks, the MACD is a squiggly line down there that looks good even though I don't trust it much, but notably the 200dma has rolled like an ocean swell since my daughter was born and the ratio is coming back in the fold right here.

So my tentative proposal (that will be changed at a moment's notice if need be......Hey! I'm getting the hang of the technical analysis :-) is that gold and WTI run together for a while. This would point to calmer waters all round (and a likely predictable dollar for the period). And I don't know about you guys, but I'm fed up to the back teeth of living in interesting times this year and a bit of boredom would suit me just fine.

Bottom line: A GOR averaging a steady 8.0 for a couple of months would be good news. It remains to be seen whether we catch a break on that.